Temotu Pele Shipping Line Ltd v Pele Shipping Co Ltd [2017] SBHC 137; HCSI-CC 65 of 2015 (12 May 2017)

IN THE HIGH COURT OF SOLOMON ISLANDS
CIVIL JURISDICTIONS

Civil Case Number 65 of 2015

BETWEEN: TEMOTU PELE SHIPPING LINE LIMITED Claimant
AND: PELE SHIPPING COMPANY LIMITED First Defendant

AND: SEGEO SHIPPING SERVICES LIMITED Second Defendant

AND: ATTORNEY GENERAL

(Representing the Director of Marine/SIMSA) Third Defendant
Date of Hearing: 21^st April 2017.
Date of Ruling: 12^th May 2017.

Mr. T. Makario for the Claimant.
Mr. D. Nimepo for the First Defendant.
Mr. F. Waleilia for the Second Defendant.
No appearances for the Third Defendant.

KENIAPISIA; PJ:

RULING ON AN APPLICATION FOR VARIOUS RELIEFS

Introduction

1. Second defendant/applicant, filed an application on 30/01/2017. Applicant sought reliefs to inter alia, dismiss this claim on the ground that the claimant’s Board of Directors, no longer have standing to make claims, for assets, it does not own, by operation of law. The application also sought to strikeout the claim, under Rule 9.75 and for variation of previous interim orders.
   

Strikeout/Dismiss Claim/Locus Stand

2. Court is of the view that it should consider these reliefs first. If the claimant’s case should fall on these grounds, then the other reliefs sought may not become necessary to consider at all.
   
3. Counsel Mr. Waleilia for the applicant submitted that Court should dismiss this claim, on the ground that the claimant has been de-registered as at 1/6/2016. Counsel submitted that claimant has no standing or locus standi because, claimant company, has been de-registered. That the claimant company does not have legal status/personality/existence as at 1/6/2016. Evidence showed that this is when the claimant was de-registered. Other evidences also showed it was removed as well in June 2013 for failure to file 2012 annual return. Counsel said, as a result of the 2016 de-registration, the asset (s) owned by the claimant company is now vested in the crown, by operation of law, under Section 146 of the Companies Act (Act No. 1 of 2009).
   
4. Counsel Mr. Makario conceded and submitted that the directors of the claimant company are not functioning. Hence Counsel is not receiving the necessary instructions to rectify the defect (de-registration). However, Counsel is of the view that this is only an administrative issue. Court understands that counsel is saying it can be rectified at any time.
   
5. Claimant had been afforded adequate time to rectify this issue at motions and mentions of this application on 7/3/2017 and again on 28/3/2017. Court also noted that when it granted interim orders to claimant sealed on 8/6/2016, the claimant company already suffered from or lacked legal personality. Counsel for the claimant was not vigilant to alert the Court on this. Evidence shows that claimant ceased to exist as a company following de-registration on 1/6/2016.
   
6. Section 146 (1) of the Companies Act (Act No. 1 of 2009) reads:-

“Property that, immediately before the removal of a company from the Solomon Islands register, had not been distributed or disclaimed vests in the crown, with effect from the removal of the company from Solomon Islands register “.

7. Court upheld the concession taken by Counsels with respect to the vesting of property in the crown, under the above mentioned provision, upon de-registration of the claimant company. There is no evidence that distribution and disclaiming of assets had happened to the company’s properties prior to de-registration.
   
8. The next pertinent question to ask is on the legal personality of the claimant company and it’s Board. Can a de-registered company claim for anything from the Court? Can a Board of a de-registered company lawfully instruct a lawyer? Does a de-registered company have standing to claim for assets that have now changed ownership by operation of law?
   
9. The answer (s) could be derived from a case law precedent of this Court. Case of Shortland Island shipping Company Limited^[1]. It is clear that the Board of the claimant company no longer existed upon de-registration in June 2016. Such been the case, the Board not giving instructions to Counsel Mr. Makario, puts Counsel at peril of acting without proper authority. Certain principles of law in the Shortland Island Shipping case, are correct prepositions in company law, which can equally apply to the facts of the case before me; though the facts in both cases differ.
   
10. The first is: a lawyer can only act with proper authority on behalf of a company; if the Board is instructing the lawyer. Here the non-existence of the claimant means non-existence of a Board to give proper instruction to Counsel. This then leads to the lawyer acting without proper authority.
    
11. Secondly when a lawyer is acting without proper authority or without a properly constituted Board’s decision; the proceeding is a nullity. As at 1/6/2016, the claimant company no longer existed. It follows that Counsel was acting in this case without proper authority from the company’s Board. And hence this proceeding is a nullity; since June 2016.
    
12. Third; the Court’s inherent jurisdiction to strike extend to all situations where the justice of the case requires it to be exercised. This claim is struck out as disclosing no reasonable cause of action, is an abuse of Court process and is frivolous and/or vexatious.
    
13. Court found that no reasonable cure could rectify this defect. For there is currently a death claimant company or a ghost company agitating this claim in this Court? The ghost company is abusing Court process. The ghost company lacks legal personality or standing. Hence the claim fail on locus standi as well.
    
14. Counsel Mr. Makario also submitted that it is an abuse of Court process that this Court is dealing with a similar application to the one, it already struck out last year. Court struck out that application for non-attendance by Counsel Mr. Waleilia; who filed the application. Court did not decide that application on the merit. And therefore the applicant took the proper cause by filing a fresh application. It is not an abuse of Court process.

Comments made in the Public Interest

15. Before making the orders; Court feel, it should make comments in the public interest. The ship that is now under dispute is a public property initially. This is public knowledge and materials showed that it was. Ship was initially bought when deceased Martin Maga was a Member of Parliament for Temotu Pele constituency. Why and how it is now owned by a private company and whether this private company is owned by the people of Temotu Pele constituency remain a mystery. This mystery can be properly investigated by the relevant authorities, government departments and the people of Temotu Pele constituency or the office of the Member of Parliament, for that constituency.
    
16. In all that the Court said; the orders of the Court are:
    
    • 16.1. The claim is dismissed.
      
    • 16.2. The interim orders of this Court previously issued are discharged.
      
    • 16.3. No order on costs. Court cannot make any orders against a ghost company.
      

THE COURT

JOHN A. KENIAPISIA

PUISNE JUDGE

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^[1] Short land Shipping Company Limited –v- Taneko (2007) SBHC 127; HCSI- CC 502 of 2006 (12^th September 2007).