Ailee Development Corporation & Anor v Lincoln (MA 72/2020 (arising in CS 27/2008)) [2020] SCSC 608 (18 September 2020)

Ailee Development Corporation & Anor v Lincoln (MA 72/2020 (arising in CS 27/2008)) [2020] SCSC 608 (18 September 2020)

The failure by the liquidator to pay the security bond as required by section 219 of the Companies Ordinance, 1972 constituted an irregularity, not a fatal defect, as the defect was curable and subsequently remedied. Section 183 of the Companies (Winding Up) Regulations, 1975 validates acts done in good faith despite formal defects unless substantial injustice results. The application to annul the liquidation and liquidator's appointment was therefore dismissed. Claims regarding stamp duty and fees were either premature or subject to ongoing inquiries by the Official Receiver and Commission of Inquiry.

Citation
[2020] SCSC 608
Parties
Applicant: EODC; Respondent: Gerard Lincoln (the Liquidator)
Court
Supreme Court
Jurisdiction
Seychelles
Judgment Date
18 September 2020
Case Number
MA 72/2020 (arising in CS 27/2008)
Procedural Posture
Notice of Motion (arising From Liquidation Proceedings) / Ruling on Application to Annul Liquidation and Liquidator's Appointment
Outcome
Application dismissed
Legal Topics
Liquidation, Appointment of Liquidator, Security Bond, Irregularity in Appointment, Taxation of Fees, Prescription, Public Interest in Insolvency
Source Language
English
Company Law Insolvency Law Liquidation Appointment of Liquidator Security Bond Irregularity in Appointment Taxation of Fees Prescription +1 more

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Parties

EODC

Applicant

Gerard Lincoln (the Liquidator)

Respondent

Procedural Posture

Notice of Motion (arising From Liquidation Proceedings) / Ruling on Application to Annul Liquidation and Liquidator's Appointment

Legal Issues

  1. 1 Whether irregular appointment of a liquidator for failure to furnish security invalidates the liquidation proceedings
  2. 2 Whether payments made by the liquidator (stamp duty and fees) were unlawful and should be refunded
  3. 3 Whether the court should intervene where matters are before the Official Receiver and a Commission of Inquiry

Ratio Decidendi

The failure by the liquidator to pay the security bond as required by section 219 of the Companies Ordinance, 1972 constituted an irregularity, not a fatal defect, as the defect was curable and subsequently remedied. Section 183 of the Companies (Winding Up) Regulations, 1975 validates acts done in good faith despite formal defects unless substantial injustice results. The application to annul the liquidation and liquidator's appointment was therefore dismissed. Claims regarding stamp duty and fees were either premature or subject to ongoing inquiries by the Official Receiver and Commission of Inquiry.

Court Disposition

Application dismissed

Orders

  • Application dismissed
  • No order as to costs