Munnings v W.B. Holdings Ltd et Al

JurisdictionBahamas
CourtCourt of Appeal
JudgeBourke, P.,Hogan, J.A.,Inniss, J.A.
Judgment Date29 Jan 1975
Neutral CitationBS 1975 CA 1
Docket NumberNo. 6 of 1974

Court of Appeal

Bourke, P.; Hogan, J.A.; Inniss, J.A.

No. 6 of 1974

Munnings
and
W.B. Holdings Ltd et al

Practice and procedure - Injunction — Interlocutory injunction

Company law - Liquidation — Institution of proceedings

Bourke, P.
1

The first respondent to this appeal, W.B. Holdings Ltd., brought an action in the Supreme Court against the appellant Mr. Kendall Munnings and the three other respondents. It was claimed that these three other respondents were liable in damages in connection with the execution of a debenture arid should be restrained from acting in any way as directors or purported directors of W. B. Holdings Ltd.: it was also sought as against Mr. Kendall Munnings that he be restrained from acting or purporting to act as liquidator of the plaintiff company.

2

Then two applications were brought by way of notice of motion. The first – that of 25 March, 1974 – was entered by Mr. Toothe on behalf of W.B. Holdings Ltd. and asked for the said restraints to be made effective pending the determination of the action. The second – that of 27 march, 1974, — was filed by Mr. Wallace – Whitfield on behalf of Mr. Kendall Munnings seeking that the name of W.B. Holdings Ltd. as plaintiff be struck out of the action.

3

The applications were heard together by Thompson, J. The interim injunction as prayed through the first was granted: the order of striking out as sought by the second was refused, the judge having formed the view that the issues involved should more properly be decided on evidence at the trial.

4

The perfected order arising out of the first application was made on the 25 April, 1974. On behalf of Mr. Kendall Munnings a notice of appeal was filed on 1 st May. The appeal was, as appears from the terms of the notice,:

“from that part of the Order herein of the Honourable Mr. Justice Maxwell J. Thompson made on the 25 April, 1974, whereby it was ordered that the above – named (4th Defendant Kendall Munnings) Appellant be restrained whether by himself, his servants or agents or otherwise, until the trial of this action or further order from acting or purporting to act as liquidator of the (Plaintiff) 1st Respondent and/or from doing any act or thing howsoever in connection with the (Plaintiff) 1 st Respondent and/or its affairs”

5

That is the express subject matter of the appeal and the notice goes on to set out mater alleged to constitute grounds of appeal. Several of these purport to question the propriety of the judge's decision in dismissing what I have referred to as the second application. But no order was perfected as to this and it was not the subject of the appeal, nor, as has been pointed out, has any leave been obtained pursuant to s. 10 of the Court of Appeal Act. The adjudication upon this second application cannot be reopened for decision as the result of a sort of side wind blowing in from so-called grounds of appeal alleged in support of a separate matter under appeal. I think that Mr. Toothe is undoubtedly right in the objection he has taken.

6

Having carefully considered the matter, I consider there is substance in the submissions put forward for the first respondent W.B. Holdings Ltd. against any interference by this court with the interlocutory order of injunction that was granted by Thompson, J. on the application dated 25 March, 1974. I would dismiss the appeal with costs.

Hogan, J.A.
7

The first respondent to this appeal took out in the Supreme Court a Writ endorsed, as against the remaining respondents, with a claim that they be restrained, inter alia, from purporting to act as Directors of the first respondent doing anything howsoever in connection with its affairs, and, as against the appellant, with a claim that he be restrained, inter alia, from purporting to act as Liquidator of the first respondent.

8

On the 25th March, 1974, the first respondent filed a Notice of Motion seeking an Order against the other respondents and the appellant in the terms of the relief claimed in the Writ.

9

On the 27th March, the appellant filed a Notice of Motion seeking an Order that the name of the first respondent be struck out as plaintiff in the action on the ground that the action was commenced without the proper authority of W.B. Holdings Ltd, (In Voluntary Liquidation) pursuant to its Articles of Association and to the provisions of The Companies Act, Cap.34.

10

Both motions were heard together on the 28th March and, on the 25th April, 1974, the learned Judge in the court below dismissed the appellant's application on the ground that the issues which flowed from it should be decided on viva voce evidence at the trial of the action and not by affidavit; he granted the first respondent's application because he was, he said, “impressed and satisfied” with the affidavit evidence filed in support of that application.

11

Against these Orders the appellant has appealed, averring that the learned judge was wrong in law in granting the Order sought by the first respondent and in refusing the Order sought by the appellant, and that the learned judge particularly misdirected himself in:–

  • (a) failing to deal with the evidence and arguments of the appellant;

  • (b) failing to determine whether the action was commenced without the proper authority of W.B. Holdings Ltd. (In Voluntary Liquidation), and in

  • (c) failing to determine whether the endorsement on the Writ of Summons disclosed any cause of action in the first respondent as against the appellant.

12

It was also claimed that the Order was, in any event, against the weight of the evidence.

13

A further ground of appeal that the affidavit evidence of the first respondent contravened Order 41 r. 8 of the Rules of the Supreme Court has not been pursued before us.

14

Before the judge in the court below there was an affidavit from Mr. Kendall Munnings, who claimed to be the Liquidator of W.B. Holdings Ltd., which said that by a special resolution passed at a meeting of the Company on the 8th February, 1974, and confirmed on the 22nd February, 1974, and again confirmed on the 25th February, 1974, it was resolved that the Company be voluntarily wound up. Documents purporting to be copies of the Minutes of these Meetings and of proxies from Fairborne Corporation Limited authorising Oliver V. Wingrove to attend and vote at these meetings and of waivers of notice of the time, place and purpose of the meetings purporting to be signed by or on behalf of Fairborne Corporation Limited and other shareholders, were exhibited to this affidavit. From these it appeared that a meeting was held on the 25th February because the interval of fourteen clear days required for confirmation of a special resolution had not expired on the 22nd February.

15

There was also an affidavit of Mr. Robert Newton Slatter, who claimed to be the official Liquidator of Fairborne Corporation Limited, averring that he had discovered, as such Liquidator, that there had been attempts by the former Directors, or some of them, of W.B. Holdings Limited to remove or incumber the assets of that Company with a view to defeating the creditors of the Company. He also claimed that he had in his possession the original minutes of the meeting alleged to have taken place on the 8th February and that they were unsigned; that the notice of the meeting showed no purpose for the meeting; and that at the time of the alleged meeting, on the 25th February, 1974, Fairborne Corporation Limited was the subject of a petition for winding up and he had been appointed the provisional Liquidator of the Company by this Honourable Court. He went on to say that, as soon as he discovered that the shares of Fairborne Corporation had been improperly voted at the meeting of the 25th February or the subject of an attempt to vote them at that meeting, he had taken steps to remove Mr. Munnings as Liquidator and to elect a new Board of Directors and that he had taken effective control of the Company on the 21st March. He also said that the Minutes of Fairborne Corporation Limited did not disclose any resolution of the Board of Directors authorising Mr. Wingrove to vote the shares of that Company at the meetings of the 8th, 22nd or 25th February and that Fairborne Corporation owned 100% of the shares in W.B. Holdings Limited, a statement which Counsel on both sides have agreed should be read as meaning that Fairborne Corporation Limited are the equitable owners of the whole capital of W.B. Holdings Limited, although there may be some other nominee share-holders.

16

As foreshadowed by this affidavit, the first respondent at the hearing in the court below took a number of procedural or technical points about the meetings on the 8th, 22nd and 25th February. These included an assertion that the waiver of notice at the two latter meetings was not signed by all the share-holders, that the meetings were irregular as the notice given was defective and those present purported to elect Mr. Wingrove as Chairman, a role which he was not qualified to fill as he was not a member of the Company and merely held a proxy authorising him to vote, which proxy was, in any event, invalid.

17

Before considering the arguments advanced on appeal by Mr. Whitfield as counsel for the Appellant it is convenient to mention that in so far as the appeal sought to question the refusal of the Judge in the court below to strike out the first respondent's name, Mr. Tooth, counsel for the first respondent, maintained that the refusal was an interlocutory order, which had never been perfected as a formal order and no appeal against it would lie without leave, which had not been obtained or even sought. See section 10 of Cap 34 and Order 59, r. 1 of the English Supreme Court Rules and the note numbered 59/1/9 in the Annual Practice 1970.

18

He did not contest that the appellant had a right of appeal against the injunction and counsel for the appellant retorted by claiming that in exercising this...

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