Grand Pacific Holdings Ltd v Pacific China Holdings Ltd [Eastern Caribbean Supreme Court]

• Jurisdiction: British Virgin Islands
• Judge: Bannister J
• Judgment Date: 11 January 2010
• Docket Number: CLAIM NO: BVIHCV 2009/389
• Court: High Court (British Virgin Islands)
• Date: 11 January 2010

EASTERN CARIBBEAN SUPREME COURT

IN THE HIGH COURT OF JUSTICE

CLAIM NO: BVIHCV 2009/389

Between

Grand Pacific Holdings Limited

Applicant

and

Pacific China Holdings Limited

Respondent

Appearances:

Mr Mark Forte and Ms Tameka Davies for the Respondent

Mr Jack Husbands and Ms Julie Engwirda for the Applicant

(Appointment of liquidators over Respondent company — application for stay pending appeal — practice)

1 Bannister J[ag]: I gave judgment today on an application by Grand Pacific Holdings Limited (“the Applicant”) for the appointment of liquidators over Pacific China Holdings Limited (“the Company”). For the reasons set out in that judgment, I have decided that liquidators should be appointed. Mr Mark Forte who appears, together with Ms Tameka Davis, for the Company, now asks for a stay of my order. The reasons he gives are (1) that the Company intends to appeal my order (2) that that appeal has at the very lowest a realistic prospect of success and (3) that unless a stay is granted, the appeal will become nugatory, because (as stated in Mr Allen's second affidavit) if liquidators are appointed, the life of an asset rich company which is carrying on a thriving business will be effectively ended.

Bannister J

2 Mr Forte referred me to a decision of Rawlins JA (as he then was) inSmith and ors v Wheatley and anor1. The question was whether a stay should be granted on a costs order made at first instance when the court struck out a statement of case. So that it is a little far on its facts from the present case. The learned Justice of Appeal referred to the general rule that a successful party is entitled to the fruits of its judgment and added that where the application of the general rule was in doubt the Court might consider the perceived strength of the appeal. Mr Forte also referred to Hammond Suddards v Agrichem International Holdings Ltd2.

That case arose out of a first instance judgment for a money sum together with orders for interim payments on account of costs and the main issue (which the Court of Appeal decided against the appellants) was whether the appellant should be ordered to bring the amount for which judgment had been given into court or otherwise secure it. On the stay point, the Court of Appeal simply refused to accept that the appellant had produced sufficient evidence to show that the appeal would be stifled unless a stay was granted.

3 I think that it follows from these authorities that I must start from the position that unless the consequence would be to cause an injustice (either because the Company could not, without the benefit of a stay, even prosecute its appeal or because unless a stay is granted the appeal would be rendered nugatory), I should not grant a stay.

4 In the course of argument I drew the attention of Counsel to the decision of Plowman J inre A&BC Chewing Gum Ltd [1975] 1 WLR 5793. The learned Judge had made an order for winding up on just and equitable grounds at the instance of disaffected contributories. He refused to stay his order, on the grounds of settled English insolvency practice. The reasons he gave for the English practice were that it was essential for the Official Receiver (who, in an English liquidation at that time was the immediate first liquidator of any company wound up by the Court) should be able to carry out his duty of ascertaining the assets of the company as at the date of the order and its liabilities at the same date, in order to be able to settle the preferential creditors. If the Official Receiver (or in this case appointed liquidators) were unable to set about this task until after the appeal had been determined, it might prove much harder. In the context of a liquidation of the Company, which carries on no trade within the jurisdiction, I do not think that these reasons weigh very heavily.

5 So far as prejudice is concerned, the authority is of more help. Plowman J took the view that where a company's business is being carried on at a profit (as Mr Allen says and I accept is the case here) it can continue to do so under the overall supervision of the liquidators, if necessary and, subject to suitable safeguards, with the present management carrying on its day to day running as managers on behalf of the liquidators. Day to day...