In the matter of The Companies Act 1997 and In the matter of Waghi Klos Limited (2011) N4283

• Jurisdiction: Papua New Guinea
• Date: 16 May 2011
• Citation: (2011) N4283
• Docket Number: MP 228 of 2008
• Court: National Court
• Year: 2011

Full Title: MP 228 of 2008; In the matter of The Companies Act 1997 and In the matter of Waghi Klos Limited (2011) N4283

National Court: Hartshorn J.

Judgment Delivered: 16 May 2011

Application to reverse decision of liquidator - s332 (1) (b) Companies Act

Facts:

A liquidator was appointed to Waghi Klos Ltd on 18th August 2008. In December 2009, Mrs. Tere Clarkson, a shareholder and director of Waghi Klos Ltd filed a notice of motion seeking leave to make application under s332 (1) (b) Companies Act that the liquidator's decision to sell certain property to Vixen No 107 Ltd be reversed. On 10th December 2009, this court ordered by consent that Mrs. Clarkson has leave to make her application and that the liquidator was restrained from completing or settling the sale of the property to Vixen. The liquidator now seeks to have the restraining order quashed and Mrs. Clarkson seeks to have the liquidator's decision reversed.

Held:

1. The liquidator's decision has not been shown to be fraudulent, not made in good faith or unreasonable in the circumstances.

2. To enable the liquidator to perform his duties and in the interests of justice the consent order should be quashed.

3. The relief sought in the notice of motion of Mrs. Tere Clarkson filed 4th December 2009 is refused. The relief sought in the notice of motion of the applicant/liquidator filed 2nd March 2011 is granted.

Cases cited:

Papua New Guinea cases

Re Papua New Guinea Block Co Pty Ltd (in liq) [1982] PNGLR 28; Salvatore Algeri v Patrick Leslie (2001) N2119; Simon Mali v The State [2002] PNGLR 548; Mainland Holdings Ltd v Paul Robert Stobbs (2003) N2522; Simon Mali v The State (2008) N3442; Department of Works v In The Matter of International Construction (PNG) Ltd (In Liquidation) (2009) SC1051; Re Companies Act 1997 and Lihir Gold Ltd (2010) N4126; Network Construction Ltd v the State (2010) N4045

Overseas Cases

Waitemata City Council v. MacKenzie [1988] 2 NZLR 242; Re Jay-O-Bees Pty Ltd (in liquidation) [2004] NSWSC 818; Consolidated Technologies Development (NZ) Ltd v. Anthony John McCullagh [2006] NZHC 505; Trinity Foundation (Services No 1) v. Downey and Anor as joint liquidators of CWF Holdings (in Liquidation) as Trustee of the CWF Unit Trust [2006] NZCA 310; Spalla v. St. George Motor Finance Ltd (No 7) [2006] FCA 1177

16th May 2011

1. HARTSHORN J: A liquidator was appointed to Waghi Klos Ltd on 18th August 2008. In December 2009, Mrs. Tere Clarkson, a shareholder and director of Waghi Klos Ltd filed a notice of motion seeking amongst others, leave to make application under s332 (1) (b) Companies Act that the liquidator's decision to sell certain property (property) to Vixen No 107 Ltd (Vixen) (liquidator's decision) be reversed.

2. On 10th December 2009, this court ordered by consent that amongst others, Mrs. Clarkson has leave to make her application and that the liquidator was restrained from completing or settling the sale of the property to Vixen (restraining order). The liquidator now seeks to have the restraining order quashed and Mrs. Clarkson seeks amongst others, to have the liquidator's decision reversed. I will consider Mrs. Clarkson's application first.

Whether the liquidator's decision should be reversed

3. Mrs. Clarkson seeks to have the liquidator's decision reversed on the grounds that:

a) the liquidator did not notify her of his appointment and Mrs. Clarkson did not become aware of his appointment until 12th November 2009,

b) the liquidator has not filed any affidavit in response to Mrs. Clarkson’s application seeking to reverse the liquidator’s decision and her affidavit in support,

c) the contract for sale of the property was entered into between the liquidator and Vixen on 29th September 2009 and not 29th June 2010 as stated by the liquidator,

d) the advertisements placed by the liquidator advertising the property for sale did not correctly state the developments upon the property,

e) Mrs. Clarkson is not aware whether the liquidator took steps to sell other assets of Waghi Klos Ltd such as motor vehicles,

f) the value of just one building of the property is in excess of K...