Bon Pacific Ltd v GM Meredith & Associates Ltd [2010] WSSC 102 (7 October 2010)

IN THE SUPREME COURT OF SAMOA

HELD AT MULINU'U

CP 9/2004

IN THE MATTER:
of Section 218 of the companies Act 1955 (NZ) and The Samoa Companies Order 1935.

BETWEEN:

BON PACIFIC LIMITED
now known as FRAMECAD BUILDING PRODUCTS LIMITED
a duly incorporated company having its head office at Auckalnd, New Zealand
Petitioner

AND:

G.M. MEREDITH & ASSOCIATES LIMITED
sometimes known as GEORGE MEREDITH & ASSOCIATES LIMITED
a duly incorporated company having its registered office at Apia.
Respondent

Counsel: R Drake for petitioner
V Kruse for respondent

Judgment: 7 October 2010

JUDGMENT OF SAPOLU CJ

The parties

1. The petitioner Bon Pacific Ltd, now known as Framecad Building Projects Ltd, is a New Zealand company. The respondent G.M. Meredith & Associates Ltd, sometimes known as George Meredith & Associates Ltd, is a local company incorporated under the Companies Act 1955.
   

History of proceedings

2. Previously, civil proceedings between the respondent as plaintiff and the petitioner as defendant concluded in a judgment given in favour of the petitioner as defendant on 11 September 2009 on the basis of its counterclaim: see George Meredith & Associates Ltd v Bon Pacific Ltd [2009] WSSC 88 per Vaai J. That judgment was in the sum of US$12,264.88 plus costs, witnesses expenses and interest pursuant to r.126 of the Supreme Court (Civil Procedure) Rules 1980.
   
3. Following the judgment, the respondent did not make any payment. On 16 February 2010, the petitioner cuased to be served on the respondent a notice of demand under s.218 (a) of the Companies Act 1955. Still the respondent did not make any payment. So on 15 March 2010, the petitioner filed its present petition for winding up under the provisions of the Companies Act 1955 on the ground that the respondent is unable to pay its debts in terms of ss.217 and 218 of that Act. So these winding up proceedings were commenced under the Companies Act 1955.
   
4. In 2001, Parliament enacted the Companies Act 2001 which makes significant changes to the company law regime under the Companies Act 1955 and repeals the 1955 Act at the end of a specified transition period. The 2001 Act was to come into force on a date nominated by the Minister by notice in the Savali. In 2006, Parliament enacted the Companies Amendment Act 2006 which makes further significant amendments to the 2001 Act, the principal Act. Then on 19 June 2008, the Minister nominated 1 July 2008 as the date on which the Companies Act 2001 was to come into force in terms of s.2 (1) of the Act.
   
5. The only issue in thse proceedings is whether the petition for winding up brought by the petitioner on 15 March 2010 under the provisions of the Companies Act 1955 should have been brought under the provisions of that Act or whether it should have been brought under the provsions of the new Companies Act 2001 which came into force on 1 July 2008. As it became clear from the days of arguments between counsel, the issue is far from straightforward as it might have been first assumed on behalf of the petitioner. However, having heard submissions from counsel, and after careful consideration of the matter, I have decided that the petition was correctly brought under the provisions of the Companies Act 1955 and it is that Act that applies to these proceedings.
   

The relevant statutory provsions

6. The first point that needs to be made is that the Companies Act 2001, as amended by the Companies Amendment Act 2006, makes an important distinction, which is maintained throughout the Act, between a "company" and an "existing company". The two terms are separately defined in s.2 of the Companies Act 2001 as follows:
   
   • (a) "company" means a company incorporated or registered under this Act, and
     
   • (b) "existing company" means a body corporate registered or deemed to be registered under Part II or Part X of the Companies Act 1955, or under the Companies Act 1933, the Companies Act 1908, the Companies Act 1903, the Companies Act 1882, or the Joint Stock Companies Act 1860.
     
7. In terms of s.2 of the 2001 Act, the respondent which is a company that was incorporated under the Companies Act 1955 would be an "existing company". To become a "company" under the 2001 Act, the respondent would have to be re-registered under Part 14 of the 2001 Act, as introduced by the Companies Amendment Act 2006, which contains provisions for the re-registration of companies that were incorporated or registered under the Companies Act 1955. A company that was incorporated or registered under the 1955 Act which fails to re-register under the 2001 Act, within the "transition period" provided in s.333, will incur the consequences provided under s.338 of the Act for failure to re-register. The term "transition period" is defined in s.333 (7) of the 2001 Act, as amended by the 2006 Amendment Act, to mean the date that is 2 years after the commencement of the Act or a later date (if any) that may be prescribed by regulations.
   
8. As the 2001 Act came into force on 1 July 2008, the transition period for re-registration of the respondent or any other "existing company" ended 2 years after the commencement of the Act, there being no later date prescribed by any regulations. Submissions by both counsel suggest that the respondent was only recently re-registered under the 2001 Act before the expiry of the transition period. So the respondent had ceased to be an "existing company" and has become a "company" under 2001 Act. At the time the petition for winding was brought on 15 March 2010, the respondent was still an "existing company" in terms of s.2 of the 2001 Act as it had then not being re-registered.
   
9. Section 336 of the 2001 Act, as introduced by the 2006 Amendment Act, insofar as relevant, provides:
   

"(3) The re-regiseration of an existing company under this Act does not:

(a) prejudice or affect the identity of the body corporate that was constituted under the Companies Act 1955 or its continuity as a legal person; or

(b) affect the property, rights, or obligations of that body corporate; or

(c) affect proceedings by or against that body corporate"

10. Counsel for the petitioner submitted that in terms of s.336 (3) (c), the recent re-registration of the respondent under the 2001 Act does not affect the present proceedings for winding up which had been brought by the petitioner on 15 March 2010 whilst the respondent was an "existing company".
    
11. Section 352 (1) of the 2001 Act repeals the Companies Act 1955 with effect from the expiry of the transition period. Section 352 (2) then revokes the Samoa Companies Order 1935 and any regulations or rules made thereunder in respect of the Compnaies Act 1955 with effect from the expiry of the transition period.
    
12. Section 353, which is the transitional and savings provision, insofar as relevant, then provides:
    

"(1) Without limiting anything in the Acts Interpretation Act 1974, nothing in this Act applies to or affects.

(a) any company on which a demand under section 218 (a) of the Companies Act 1955 has been served before the commencement of this Act;

(b) any application to the Court for the winding up of a company made before that commencement;

...

"(2) The relevant provisions of the Companies Act 1955, and any rules and regulations made under or in respect of that Act, as in force immediately before the commencement of this Act, continue to apply, with all necessary modifications, to the matters set out in subsection (1) as if the Companies Act 1955 had not been repealed and as if these rules and regulations had not been revoked."

13. From the wording of s.353 (1) and the general scheme of the 2001 Act, it would appear that the kind of company that s.353 (1) is referring to is a company that was incorporated under the Companies Act 1955 and which has been re-registered under Part 14 of the 2001 Act as amended by the 2006 Amendment Act. That means an "existing company" that has become a "company" in terms of the 2001 Act.
    
14. The term "company" is defined in s.2 of the 2001 Act to mean a company incorporated or re-registered under the 2001 Act. So when the term "company" is used throughout s.353 (1), it must be taken that s.353 (1) is referring to a "company" as defined in the Act.
    
15. More specifically, because s.353 (1) (a) refers to a company on which a demand under s.218 (a) of the Companies Act 1955 has been served before the commencement of the 2001 Act, and s.353 (1) (b) refers to an application for the winding up of a company made before that commencement, the term "company" as used in s.353 (1) (a) and (b) must be taken to be limited in meaning to an "existing company" that was incorporated or registered under the Companies Act 1955 but has now been re-registered under Part 14 of the 2001 Act. The term "company in s.353 (1) (a) and (b) would not include a new company that only came into existence for the first time through incorporation under the 2001 Act after that Act had come into force.
    
16. This is because s.353 (1) (a) refers to a demand made on a company under s.218 (a) of the 1955 Act before the commencement of the 2001 Act and s.353 (1) (b) refers to an application for winding up a company that is made before the commencement of the 2001 Act. So s.353 (1) (a) and (b) would not apply to a new company that only came into existence for the first time after the commencement of the 2001 Act because such a company would not have been in existence before the commencement of the 2001 Act. A demand in terms of s.353 (1) (a) could not have been served on a non-existent company; neither could an application in terms of s.353 (1) (b) have been made to wind up a non-existent company.
    
17. This means that until the respondent was recently re-registered under the 2001 Act, s.353 (1) (a) and (b) did not apply to it. The respondent was still an "existing company" in terms of s.2 of the Act at that time. Upon re-registration under Part 14 of the 2001 Act as amended by the 2006 Amendment Act 2006, the respondent ceased to be an "existing company" and became a "company" in terms of the 2001 Act and that Act, and s.353 (1) (a) and (b) in particular, applied to it in terms of s.353 (2).
    
18. Section 353 (2) of the 2001 Act provides that the relevant provisions of the Companies Act 1955, in force immediately before the commencement of the 2001 Act, continue to apply with all necessary modifications to the matters set out in s.353 (1) as if the Companies Act 1955 had not been repealed. This wording is consistent with the nature of s.353 as a general transitional and savings provision. It means that upon re-registration of the respondent under the 2001 Act, the Compnaies Act 1955 still applies, with any necessary modifications, to a demand made under s.218 (a) of the 1955 Act and served upon the respondent before the commencement of the 2001 Act as well as any winding up application made against the respondent that was brought before the commencement of the Act. In short, it is the Companies Act 1955 that still applies to the present petition to wind up the respondent even though the respondent has been recently re-registered under the 2001 Act.
    
19. The above interpretation of s.353 would also be consistent with the wording of s.336 (3) (c) of the 2001 Act which provides that the re-registeration of an existing company under the Act does not affect proceedings by or against that body corporate.
    
20. The submissions by both counsel were directed primarily to the question of which Act, the 1955 Act or the 2001 Act, applies to the present petition to wind up the respondent, which was brought on 15 March 2010, before the respondent was re-registered. The short answer is that it must be the Companies Act 1955 even though arriving at this answer is not as straight forward as it had been first assumed.
    
21. Section 352 (1) of the 2001 Act is clear that the 1955 Act is only repealed on the expiry of the transition period as provided in s.333 (7) of the 2001 Act. According to the submissions by counsel for the respondent, the transition period did not expire until 30 June 2010. So as from 15 March 2010 when the petitioner's petition for winding up the respondent was brought under the Companies Act 1955 until the respondent was re-registered under the 2001 Act, it was still the 1955 Act that applied to it. Upon re-registration of the respondent, it is clear from s.353 (2) of the 2001 Act that the provisions of the 1955 Act still apply but with any necessary modifications. No necessary modifications were suggested in the submissions of counsel.
    
22. Thus, before the re-registration of the respondent and after its re-registration under the 2001 Act, it is still the 1955 Act that applies to the petitioner's winding up petition.
    
23. Reference was made by counsel for the respondent to s.19 of the Acts Interpretation Act 1974 which contains general provisions as to repeals of statutes. However, s.19 provides that it applies "except where the context manifests that a different construction is intended". Section 353 of the 2001 Act clearly manifests that a different construction is intended so that s.19 would not apply.
    

Conclusion

24. For the foregoing reasons, I conclude that the petitioner's petition for winding up was properly brought under the Companies Act 1955 which still applies to it.
    
25. I make no order as to costs as these proceedings were concerned with a test issue.
    
26. Counsel for the respondent to advise now whether the respondent still opposes the winding up petition by the petitioner.
    

CHIEF JUSTICE

Solicitors
Drake & Co for petitioner
Kruse, Enari & Barlow for respondent