Liberty Development Company Ltd ((in Liquidation)), Re. Application

• Jurisdiction: Trinidad & Tobago
• Court: Court of Appeal (Trinidad and Tobago)
• Judge: Jones, J.A.
• Judgment Date: 24 March 2016
• Neutral Citation: TT 2016 CA 7
• Docket Number: Civil Appeal No. 91 of 2015; CV 04515 of 2009
• Date: 24 March 2016

Court of Appeal

Mendonca, J.A.; Smith, J.A.; Jones, J.A.

Civil Appeal No. 91 of 2015; CV 04515 of 2009

Liberty Development Company Ltd (in Liquidation), Re. Application

Appearances:

Mrs. Zelica Haynes Soo-Hon instructed by Ms. K. Mark and Ms. A. Ramroop for the appellant.

Mrs. Ruth Van Lare instructed by Mr. W. Smart for Bhim Ramsaran and Nigel Ramsaran.

Mr. Gregory Armorer instructed by N.S. Ratiram &Co. for COPOS Credit Union Co-Operative Society Limited.

Civil practice and procedure - Appeal of the judge's decision to set aside an order made ex parte by the Official Receiver for the public examination of certain persons — Whether the judge could on his motion and in the absence of valid application discharge the ex parte order where that order had already been perfected and amended by consent.

I have read the Judgment of Jones, J.A and I agree with it.

A. Mendonça

Justice of Appeal

I too agree.

G. Smith

Justice of Appeal

Jones, J.A.

1 This is an appeal arising from a decision of the trial judge setting aside an order made by him ex parte on the application of the Official Receiver for the public examination of certain persons. It was filed as a procedural appeal. At the hearing of the appeal objection was taken on the basis that this was not a procedural appeal. Without going into the merits of the objection the reality is that, whether procedural or not, this appeal has been brought within the 6 week time limit fixed by the rules for bringing an appeal. In addition some considerable time has been spent in the hearing and determination of this appeal. In our view to refuse to treat with this appeal at this stage will serve no useful purpose and would be a waste of the Court's resources.

2 On 15th February 2011 Liberty Development Company Limited (“the Company”) was ordered to be wound up and the Official Receiver made its provisional liquidator. Prior to the winding up order the Company had been engaged in the business of developing lands and building houses for sale. The COPOS Credit Union Co-Operative Society Limited (“COPOS”) is the mortgagee of two parcels of these lands and, in the year 2008, had taken possession of those parcels of land.

3 Pursuant to a report made by the Official Receiver under section 399 of the Companies Act Chap. 81:08 (“the Act”) on the 14th April 2014 the trial judge ordered a public examination of two directors of the Company, Nigel and Bhim Ramsaran (“the Ramsarans”), and two representatives of COPOS. This order was made ex parte.

4 On the return date, 3rd June 2014, both the Ramsarans and COPOS appeared and were represented by Attorneys. By consent, and at the request of COPOS, the order was amended to, among other things, add COPOS' finance manager to the list of persons earmarked for public examination. The hearing was then adjourned. After the adjournment, by letter dated 13th June 2014, COPOS brought to the Judge's attention the case of In Re General Phosphate Corporation [1895] 1 Ch. 3 and requested an opportunity to address the judge on the case. Around the same time by email to the judge the Ramsarans indicated their intention to apply to set aside the ex parte order for their public examination.

5 On the 3rd July 2014 directions were given for the filing of written submissions on the case raised by COPOS. Thereafter the hearing was adjourned from time to time. On the 22nd October 2014 an application was filed on behalf of COPOS. This application sought to have the order made ex parte discharged and the proceedings transferred to the civil registry of the High Court and conducted under the Rules of the Supreme Court 1975 (“the 1975 Rules”).

6 The grounds of the application were: (i) the Official Receiver, contrary to section 399 of the Companies Act, had not stated in any preliminary or further report that in his opinion a fraud or improper conduct had been committed or engaged in by any person in the promotion or formation of the company neither was fraud apparent or manifest on the face of the preliminary and further report; and (ii) Part 2.2(3) of the Civil Proceeding Rules 1998 as amended (“the CPR”) provided that the CPR does not apply to proceedings in insolvency including the winding up of companies these proceedings therefore had been commenced and conducted under the CPR contrary to that rule.

7 Despite filing the application to set aside the ex parte order COPOS filed no written submissions in accordance with the judge's order. Written submissions were however filed by the Ramsarans. Basically these submissions adopted the position advanced by COPOS as set out in the grounds of its application with respect to the requirements of section 399 of the Act. However despite the earlier indication of their intention to file an application to set aside the order no application to do so was filed by the Ramsarans.

8 After hearing further oral submissions by all three parties on 16th April 2015 the judge delivered his decision and, by order dated 29th April 2015, discharged the ex parte order made on 14th April 2014. It is this ruling and the order discharging the public examination that is the subject of this appeal brought by the Official Receiver.

9 In his ruling the judge found that no application had been filed by the Ramsarans to set aside the ex parte order and that the only application to set aside had been filed by COPOS on 22nd October 2014 in circumstances where: it had not objected to the order on the first inter partes hearing on 3rd June 2014; had consented to the addition of a person to be examined and had volunteered the name of that person. The judge, therefore, held that there was no reasonable diligence in applying for the discharge of the order and ruled that the application [the judge's ruling in fact refers to “applications” but we have been unable to find any application other than that filed by COPOS on the 22nd October 2014] was out of time and would not be considered. There has been no appeal from this part of the judge's order.

10 Immediately thereafter in his ruling the judge, however, stated:

“If however the court has erred in this regard, and, in any event, the court will go on to consider the matters raised in the authority relied upon by attorneys at law for COPOS which formed the basis for the filing of the submissions.”

11 After considering the authorities of: In Re General Phosphate Corporation (1892) 3 Ch. 332; Ex parte Barnes [1895-99] All E.R. 1275; In Re Civil, Naval and Military Outfitters Limited [1899] 1 Ch.215 and Tejani and Others v. Official Receiver [1963] 1 All E.R. 429 the judge formulated as a question for his consideration “whether there is a sufficient factual nexus leading up to the Official Receiver's conclusion as to fraud or improper conduct or whether the report is so flimsy, so sketchy, so unfair as to exceed the court's jurisdiction.”

12 The judge then concluded:

“Upon the mature consideration of the case law and principles expressed therein which the court has only now been able to lay its hands on, the court is of the respectful view that leave ought not to have been granted for the public examination of the persons mentioned in the schedule to the order pursuant to section 399 of the Companies Act and therefore the court discharges its Order made for the public examination on the 14th of April 2014 with no order as to costs….”

13 The order made by the judge, and perfected on 29th April 2015, reflects this conclusion. In effect therefore, having dismissed the application, the judge set aside his own order in the absence of any application to do so.

14 One of the grounds of appeal relied on by the Official Receiver is that:

“The learned judge having found that the applications were out of time and would not be considered was wholly wrong in holding that he had jurisdiction to consider whether the Order made on the 14th April 2014 should be discharged.”

15 At the hearing of the appeal the parties were invited to file further submissions on the question of:

“whether having dismissed the applications the High Court could proceed on its own motion to discharge the order made on the 14th April.”

Further submissions on this question were filed by the Ramsarans on 17th August and the Official Receiver on the 11th September 2014. COPOS filed no further submissions.

16 On the facts of this case therefore for our consideration is whether the judge could on his own motion, and in the absence of any valid application, discharge the ex parte order made by him in circumstances where that order had already been perfected and amended by consent. If it was open to the judge to do this then the further question for our determination is whether the finding of the judge that the requirements of...