PT Ventures, SGPS, S.A. v Vidatel Ltd

• Jurisdiction: British Virgin Islands
• Judge: Wallbank, J.
• Judgment Date: 27 June 2022
• Judgment citation (vLex): [2022] ECSC J0627-2
• Docket Number: CLAIM NO. BVIHCM2021/0039
• Court: High Court (British Virgin Islands)
• Year: 2022

EASTERN CARIBBEAN SUPREME COURT

IN THE HIGH COURT OF JUSTICE

COMMERCIAL DIVISION

CLAIM NO. BVIHCM2021/0039

Between:

PT Ventures, SGPS, S.A.

Claimant

and

Vidatel Limited

Defendant

Appearances:

Mr. Christopher Harris, QC with him Ms. Georgina Peters for PT Ventures, SGPS, S.A.

Mr. Hermann Boeddinghaus, QC with him Ms. Meenaa Azmayesh for Vidatel Limited

1 Wallbank, J. (Ag.): This judgment concerns what is to be done about an order which appointed liquidators, made in error after the application for their appointment has already been deemed by statute to have been dismissed. Counsel indicated that this is the first time the problem appears to have arisen in the context of the Insolvency Act, 2003 (‘the Act’), 1 of the Territory of the Virgin Islands (‘BVI’).

Introduction

2 On 5 ^th March 2021 PT Ventures, SGPS, S.A. (‘PTV’) filed an Originating Application to wind up Vidatel Limited (‘Vidatel’). This led to a contested hearing taking place on 16 ^th June and 7 ^th July 2021, with both sides represented by senior and junior Counsel, at the end of which the Court reserved its decision. On 30 ^th September 2021 the Court delivered the result and

announced circulation of draft written reasons. The Court made an order on 30 ^th September 2021 that Vidatel be wound up and appointing liquidators (‘the Appointment Order’)

3 Both parties were represented by junior Counsel only at that hearing. Neither side raised the fact that the statutory six-month period for determination of the application to appoint liquidators had by then already expired on 5 ^th September 2021, and thus that the application to appoint liquidators had already been deemed to have been dismissed. The legal practitioners for PTV had inquired as to the likely delivery date (in the vernacular, ‘chased’) of the Court's judgment on 8 ^th September 2021, without mentioning the expiry and deemed dismissal which by then had already occurred. The judgment delivery hearing had been convened at short notice for 30 ^th September 2021 as soon as the judgment was ready.

4 The Court's order of 30 ^th September 2021 was entered on 6 ^th October 2021. Five days later, on 11 ^th October 2021, Vidatel filed an Ordinary Application (‘Vidatel's Set Aside Application’) seeking orders to:

• (1) set aside the Appointment Order; alternatively;

• (2) stay the Appointment Order permanently;

• (3) stay the Appointment Order pending determination of the Set Aside and Stay Application; and

• (4) require PTV to pay Vidatel's costs of these proceedings.

5 The ground, in short, for this application was that pursuant to section 168(3) of the Act, the application to wind up Vidatel was deemed to have been dismissed on 5 ^th September 2021, being six months after 5 ^th March 2021, since no extension of that period had been sought nor granted pursuant to section 168(2) of the Act.

6 Section 168 of the Act materially provides:

“(1) Subject to subsection (2), an application for the appointment of a liquidator shall be determined within six months after it is filed.

(2) The Court may, upon such conditions as it considers fit, extend the period referred to in subsection (1) for one or more periods not exceeding three months each if

(a) it is satisfied that special circumstances justify the extension; and

(b) the order extending the period is made before the expiry of that period or, if a previous order has been made under this subsection, that period as extended.

(3) If an application is not determined within the period referred to in subsection (1) or within that period as extended, it is deemed to have been dismissed.”

7 In basic terms, Vidatel wants to get rid of the Appointment Order, but Vidatel does not want to go to the trouble and expense of bringing appeal proceedings in the Court of Appeal to achieve this. This is entirely understandable. Vidatel submits that an appeal is not necessary anyway: it says this Court has an inherent jurisdiction to set aside or stay permanently that order.

8 PTV responded to this application by trying to maintain the Appointment Order. This too is entirely understandable, for a number of reasons, not least because PTV otherwise faces a significant potential costs liability towards Vidatel in respect of the present winding up proceedings, having allowed the six-month period for its determination to expire without obtaining an extension. It is not lost on me that the error, although ascribable to PTV, is a legal error or omission, more probably made by PTV's legal practitioners than by PTV itself. If that is the case, I stress that I have every sympathy, and indeed empathy, for those legal professionals who made the error or omission, but I am bound to follow and apply the law.

9 PTV sought to maintain the Appointment Order by filing an Ordinary Application of its own (‘PTV's Slip Rule Application’), on 12 ^th October 2021. By this application, PTV sought an order pursuant to Part 42.10 of the Civil Procedure Rules, 2000 (‘CPR’), commonly referred to as the ‘slip rule’, with the purpose of:

“correcting the error arising from an accidental slip or omission made in the order pronounced by the Honourable Mr Gerhard Wallbank [Ag.] on 7 July 2021 and/or the formal written order made on 2 June 2021, so as correctly to reflect the intention of the Court and the parties that the period in which PT Ventures' application to appoint liquidators over Vidatel Limited (the “Application”) shall be determined be extended three months after the expiry date of the Application.”

10 The orders referenced in the Slip Rule Application were the orders made at the close of the hearing on 7 ^th July 2021 simply reserving judgment – no written order was entered to this effect – and an order made on 2 ^nd June 2021. The order of 2 ^nd June 2021 had been a consent order presented to the Court by the parties, in which they had agreed that PTV should have until 31 ^st May 2021 to file evidence, ahead of the hearing of the application to appoint liquidators on 16 ^th June 2021. Neither of those orders extended the period for determination of the Originating Application for winding up Vidatel. Nor had there been any application made, as at 2 ^nd June 2021 or 7 ^th July 2021, seeking an extension of the six-month period.

11 PTV has argued, furthermore, that upon a review of the Appointment Order, the interests of justice would be served by maintaining it.

12 The matter came back before the Court on 28 ^th October 2021. The Court ordered that the Appointment Order be stayed pending determination of Vidatel's Set Aside Application and PTV's Slip Rule Application and gave directions for these two applications to be heard together.

13 These two applications were heard on 9 ^th and 10 ^th February 2022. Judgment was reserved. This is the Judgment on Vidatel's Set Aside Application and PTV's Slip Rule Application. In my respectful judgment, Vidatel's Set Aside Application and PTV's Slip Rule Application both fail, for the reasons I shall now explain.

Vidatel's Set Aside Application

14 Vidatel's primary position is that the Appointment Order had been made at a time when the Court lacked jurisdiction to make that order, that the Court has power to set aside its own order in exceptional circumstances and indeed it must, in the present circumstances, do so.

15 Vidatel relies in this regard upon dicta of Lord Sumption in Sans Souci Ltd v VRL Services Ltd: 2

“The importance of finality in litigation has been emphasised by generations of common lawyers. Ultimately there must come an end to the parties' opportunities for reopening matters procedural or substantive which have been judicially decided. This principle is, however, founded on an assumption that they were decided in accordance with the rules of natural justice. Notwithstanding the importance of finality, the rule of practice is that until either (i) a reasonable time has elapsed, or (ii) the order has been perfected, a party who has not been heard on costs or other matters arising out of a judgment, is entitled as of right to be heard. Thereafter, the Court still has an inherent jurisdiction to hear him, but the test is more exacting. The order will be varied only in exceptional circumstances, when the party can demonstrate that the form of the order can be attributed to a miscarriage of justice: Taylor v. Lawrence [2002] EWCA Civ. 10, [2003] QB 528 at [55]. The Board would endorse the test which was formulated in Re Uddin [2005] I WLR 2398, at [4], and applied by the Court of Appeal in this case, that there must be “special circumstances where the process itself has been corrupted.” This is not the occasion for extended review of the circumstances which will satisfy this test, but the Board has no doubt that one of the circumstances which will

satisfy it is that the party desiring to be heard did not have a reasonable opportunity to be heard at an earlier stage when the test would have been less formidable.” (Emphasis supplied.)

16 Sans Souci concerned the entitlement of a party to be heard, in relation to a costs order, which had been made without hearing either side on it, and not a winding up order made after the application to appoint liquidators had already been deemed dismissed.

17 Vidatel develops its reliance upon this principle by submitting that one of the exceptional situations which requires the Court to set aside its own order is where it lacked jurisdiction to make the order: per the Privy Council's decision in Chief Kofi Forfie v Barima Kwabena Seifah 3 (following the decision of Lord Greene MR in the English Court of Appeal decision Craig v Kanssen 4). The material passage from the Privy Council's decision in Chief Kofi Forfie is as follows:

“A court has inherent power to set aside a judgment which it has delivered without jurisdiction. Lord Greene M.R. in Craig v. Kanssen, after referring to several decisions, said: “Those cases appear to me to...