Globe-X Canadiana Ltd, Re. et Al

• Jurisdiction: Anguilla
• Judge: George-Creque, J.
• Judgment Date: 25 October 2004
• Neutral Citation: AI 2004 HC 14
• Docket Number: AXAHCV/2003/0022
• Court: High Court (Saint Christopher, Nevis And Anguilla)
• Date: 25 October 2004

High Court

George-Creque, J.

AXAHCV/2003/0022

Globe-X Canadiana Limited, Re. et al

Appearances:

Ms. M.E. Birnie Stephenson-Brooks on behalf of Silicon Isle Limited

Mr. James Hilsdon on behalf of the joint liquidators

Mr. Kenneth Porter in attendance for Globe-X Canadiana Limited and Globe-X Management Limited

Company law - Application for removal of liquidators — Application for recognition of winding up order made in Bahamian court — Applications misconceived and dismissed.

George-Creque, J.

1 This matter concerns applications made at the instance of Silicon Isle Limited, an Anguillan corporation, (“Silicon”) for the removal of Clifford A. Johnson and Wayne Aranja as foreign joint official liquidators (“the liquidators”) of Globe-X Canadiana Limited (“GXC”) and Globe-X Management Limited (“GXM”) together referred to herein as “the Globe-X Companies”). Silicon claims to be a creditor of the Globe-X Companies. The first application for removal of the liquidators was filed on June 4th 2003. This application does not appear from the record to have been pursued on behalf of Silicon. A further application for removal was filed on 23rd September, 2004. Both of these applications will be hereafter referred to as “the removal applications”.

Historical Background

2 In order to gain an appreciation of the removal applications it is necessary to set out the background leading up to the removal applications which I now summarise –

The removal applications —— History

• (a) The Globe-X Companies were incorporated under the laws of the Bahamas as international business companies.

• (b) On 12th July, 2002 Cinar Corporation (“Cinar”), a Canadian company, filed a creditor's petition in the Supreme Court of the Commonwealth of the Bahamas (“The Bahamas court”) in respect of the Globe-X Companies seeking their winding-up in respect of a debt of US $41,592,730.95 owed to Cinar. Later that day the Globe-X Companies sought to be re-domiciled in Anguilla.

• (c) On 3rd September, 2002, The Bahamas court dismissed an application by the Globe-X Companies challenging its jurisdiction on the ground that the Globe-X Companies were now Anguillan companies by virtue of their re-domiciliation from the Bahamas to Anguilla.

• (d) On 5th September, 2002, The Bahamas court made winding-up orders in respect of the Globe-X Companies and appointed the liquidators.

• (e) On 4th April, 2003, a letter of request was issued by The Bahamas court addressed to the Supreme Court of Anguilla requesting the Anguillan courts to recognise the appointment of the liquidators.

• (f) application was then made on behalf of the liquidators for their recognition in Anguilla. An order for recognition was first obtained ex-parte on 8th April, 2003 before Mitchell, J. This ex-parte order was subsequently confirmed by Edwards, J. on 12th May, 2003 (“the recognition order”) after an inter-partes hearing at which the Globe-X companies as well as Silicon, who claims to be a major creditor of the Globe-X Companies were represented and heard.

• (g) The Globe-X Companies and Silicon filed appeals against the recognition order — the Globe-X Companies on 6th June and Silicon on 24th June, 2003. These appeals are still pending.

• (a) No return date was specified for the hearing of the first removal application which was supported by the affidavit of Lynwood Bell filed on 4th June 2003 (“Bell's first affidavit”).

• (b) A further affidavit was filed by Lynwood Bell on 26th June, 2003. The liquidators filed an affidavit in opposition that same day by Clifford A. Johnson (“Johnson's third affidavit”). This application was not disposed of.

• (c) On 23rd September, 2003, the second removal application was filed but accompanied by no fresh evidence and referred to the draft order attached to the first removal application. This application gave a return date of 3rd October, 2003. Silicon's solicitor however, by letter dated 1st October 2003, sought an adjournment due to his unavailability on 3rd October, necessitated by personal circumstances. The liquidators did not oppose the adjournment in the circumstances.

• (d) The second removal application remained dormant until June 23rd 2004 when Silicon filed an application seeking an extension of time for filing written submissions and for directions. The return date was 16th July, 2004.

• (e) On 13th July the liquidators filed a cross application opposing the extension of time and for dismissal of the removal applications. The written submissions were filed on the same date.

• (f) When the time application came on for hearing on 16th July, it was ordered that the written submissions filed as of 13th July, be deemed to be duly filed and that the removal applications be heard on Monday 26th July 2004. It was also ordered that the any further written that the matter be dealt with on the basis of the written submissions submitted by both sides without the need for further oral submissions. Counsel for the liquidators was in agreement with this course and the court accordingly, then gave further directions to the following effect –

  • (i) That the applicant (Silicon) file and serve written submissions (emphasis added) addressing the issue of locus standi not later than Tuesday 27th July, 2004, and

  • (ii) That the liquidators file and serve further submissions in response, if necessary by 29th July, 2004.

4 No directions or orders were given for the filing of further affidavit evidence by either side. What transpired is that Silicon not only filed written submissions but also filed a further affidavit of Lynwood Bell (“Bell's 8th affidavit”). The result of this is that the liquidators then filed on 3rd August, 2004 written “consolidated submissions” opposing the removal applications and a further affidavit of the liquidators by Clifford A. Johnson (“Johnson's 5th affidavit”) on 10th August, in response to Bell's 8th affidavit. For the sake of tidying up the record and so as to embark upon the determination of the questions raised and saving further time, I will deem the steps taken by Silicon in filing further affidavit evidence and the further affidavit evidence filed by the liquidators to have been duly taken and filed and time for so doing abridged respectively. I would be remiss however, if I did not record my displeasure with the approach taken by Silicon in filing further evidence without first seeking the court's approval. Surely, Silicon must have appreciated their need to do so when faced with the challenge to locus at the hearing on 26th July, 2004 and ought to have sought permission then to do so at the same time that they sought further time to address the said issue by further written submissions. This approach is to be deprecated and it is hoped will not be followed in future.

Silicon's locus standi

5 Silicon has brought the removal applications pursuant to sections 167, 168, and 172 of the Insolvency Act 1986 [UK]. In Hugh C. Marshall Sr. v. Antigua Aggregates Ltd. et all the Court of Appeal appears to have accepted that the English Insolvency Rules 1986 were the relevant rules applicable to company winding-up proceedings in Antigua & Barbuda, the Antigua legislation having provided no winding up rules of its own. Anguilla is in a similar position having no winding up or insolvency legislation of its own and section 9 of the Eastern Caribbean Supreme Court (Anguilla) Act mirrors section 11 of the Eastern Caribbean Supreme Court Act of Antigua & Barbuda.

Section 167(3) of the Insolvency Act states as follows –

“167 (3) The exercise by the liquidator in a winding up by the court of the powers conferred by this section is subject to the control of the court, and any creditor or contributory may apply to the court with respect to any exercise or proposed exercise of any powers.” (emphasis added).

This provision however, does not address the question of removal of liquidators but certainly addresses the question as to locus standi in that the persons given standing to apply to the court is a creditor or a contributory. Sections 171 and 172 of the Insolvency Act 1986 deal with removal of a liquidator. Specifically, section 172 deals with removal of a liquidator on a winding up by the court and says in essence, that a liquidator may be removed from office only by an order of the court or by a general meeting of the company's creditors. A creditor of the company being wound up would obviously then be a person with the requisite locus standi to apply to the court for the removal of a liquidator. The removal applications...