In re the Estate of Rex Fera, Ex parte Mobil Oil Australia Pty Ltd [2001] SBHC 42; HC-CC 177 of 2000 (7 July 2001)

IN THE HIGH COURT OF SOLOMON ISLANDS

Civil Case No. 177 of 2000

IN THE MATTER OF: IN THE ESTATE OF REX REX FERA

(A Bankrupt) (Trustee Appointed)

Judgment Debtor

v

EX PARTE: MOBIL OIL AUSTRALIARALIA PTY LIMITED

(Formerly Mobil Oil Australia Limited)

Judgment Creditor

High Court Of Solomon Islands

Before: Frank O. Kabui, J

Civil Case No: 177 of 2000

Hearing: 7^tht">th July 2001

Ruling: 7^th July 2001

J. Sullivan forTrustees

C. Ashley for Tori and others

J. Hauirae for Martha Maofalifaga and Remex Fera

M.D. Jones for Judgment Creditor

RULING

(Kabui, J): By Summons filed on 2^nd August 2001, the Trustees of Remex Investment Limited, Bremex Limited and Richstone Real Estate Limited sought the following orders-

1. & p;&nssp; Subj>Subject to the applications by their counsel undertaking not to deal in any way (othen colon ofs and maintenance and repairs) with any land registered in the the namesnames of a of any of Remex Investment Limited, Bremex Limited or Richstone Real Estate Limited until the determination of the application for leave to appeal and the appeal (if leave is granted) in civil case no.37 of 2001 or until further order, the injunctions granted on 24 November 2000 against Remex Investment Limited, Bremex Limited and Richstone Real Estate Limited in the above matter are discharged forthwith.

2. &nnbsp; The cThe costs of of an incidental to this application be the Trustees’ costs in the administratib>

3. &nbssp; &nsp; Such furdher tions or orde orders as to the Honourable

Court may seem meet.

I heard this application this morning and gr the orders sought. I said said I would deliver the reasons in a written ruling later. I do so now.

The Background

lass="Mss="MsoNormal" style="margin-top: 1; margin-bottom: 1"> On 24^th Ner 2000, I granted an injunction against Remex Investment Lent Limited, Premex Limited and Richstone Real Estate Limited, their directors, servants or agents to restrain them from selling, leasing, charging or otherwise dealing with or making any disposition of any of their property including real property, shares, motor vehicles and bank accounts pending the determination of the Creditor’s Petition or further order. On 13^th December 2000, I made the receiving order against the estate of Mr. Fera (now adjudged bankrupt). I also appointed Messrs Morris and Prince as Special Managers. The injunction however remained in force. By Order made on 23^rd May 2001, I ordered that (1), the statutory register in respect of Remex Investment Limited, Bremex Limited and Richstone Real Estate Limited be regularised or if there be no register, to create one to accord with the declarations in that Court Order and (2) the Trustees (then Special Mangers) convene an extraordinary general meeting of Remex Investment Limited, Premex Limited and Richstone Estate Limited for the purpose of the shareholders appointing new directors, removing directors or continuing them as the shareholders might think fit. In pursuance of this Order, an extraordinary general meeting of Remex Investment Limited, Premex Limited and Richstone Real Estate Limited was convened on 27^th July 2001. In all of these Companies, Mr. Fera had ceased to be a director following his being adjudicated a bankrupt by order of this Court on 13^th June 2001. He was also removed as Company Secretary. Messrs Morris and Anders were appointed directors of all these Companies. It was also resolved by all these Companies that the injunctions I ordered on 24^th November 2000 be lifted and they would instruct their legal adviser to make an application to the court in that regard. Other matters were also dealt with at that Meeting on 27^th July 2001.

ass="MsoNoMsoNormal" style="margin-top: 1; margin-bottom: 1"> Hearing of the application

The Summons filed on 2^nd August 2001 above was copieMr. Tori and others, Mobil obil Oil Austral Pty Limited, the Creditor, and A & A Legal Services, the Solicitor for Mr. Tori and others. Mr. Hauirae for A& H Lawyers appeared for Martha Maofalifaga and Remex Fera. Mr. Wasiraro of the Pubic Solicitor’s Office who appeared for Mr. Fera, already adjudicated a bankrupt, was opposed by Counsel for the Trustees, Mr. Sullivan. I ordered that Mr. Wasiraro be excused and he left the Courtroom. The reason was that this application was being made on the request of all Companies at the extraordinary general meeting held on 27^th July 2001. The resolution to do this was passed by the new directors appointed at that Meeting. Mr. Fera, the bankrupt, had played no part in that decision. He cannot challenge the decision of the new directors in this regard. This is however, not saying, that a bankrupt has no rights whatever in terms of the administration of the estate by the trustees. There are protective provisions in the Act but they are limited in scope and are within the supervisory powers of the Court. The position of a bankrupt is that-

“...As so a person becomes bankrupt all the ‘property of the bankrupnkrupt” as defined in s.116 (………) vests forthwith in the Official Receiver in Bankruptcy, and the official receiver for the Bankrupt District in which the sequestration order was made or in which the debtor’s petition was presented (as the case may be) becomes the trustees of the estate (s.160). Upon the appointment of a registered trustee in place of the official reliever, the property passes automatically to the trustee form The Official Receiver in Bankruptcy subject to any registration requirements… ………. The result is that from the time when the debtor becomes bankrupt he is automatically deprived of most of his property and all the attributes of ownership are shorn from him, so that any attempt on his part to deal with it is no more effective than the act of a complete stranger, subject always to the protective provisions discussed in the previous chapter”…(see page 148 of Lewis’s Australian Bankruptcy Law by Dennis J. Rose 1970 sixth Edition.)

The appearance of Mr. Fera as a bankrupt in Court through Counsel, Mr. Wasiraro, was thas therefore that of a stranger as far as the trustees were concerne for the purpose of this application. I upheld Mr. Sullivan's objection on this basis.

There was also confusion over which Counsel should represent Remex Investment Limited, Premex Limited and Richstone Real Estate Limited as they were represente by C by Counsel Mr. Ashley in Civil Cases No. 7 and 37 of 2001. The fact is that the change of control of these Companies was effected on 27^{up> July 2001 at01 at the extraordinary general meeting atng at which new directors were appointed who are now in control of tfairs of these Companies in compliance with the Orders I made on 23rd June June 2001 referred to above. Counsel Mr. Ashley could no longer represent them in this application.}

This Application

p class="Mss="MsoNormal" style="margin-top: 1; margin-bottom: 1"> This application was made to remove the effect ofinjunction I granted on 24th November 2000 whilst awaiting the determination of the appeal filed by the Appellants. It is a move designed to preserve land held in the names of the Companies for that period of time. It is a move premised upon a sense of accountability for the good administration of the estate under the control of the trustees. The trustees had made out a good case for the orders sought and so I granted them this morning.

ass="Mss="MsoNormal" align="center" style="text-align: center; margin-top: 1; margin-bottom: 1"> F. O. Kabui

Judge