In a matter in the Eastern Caribbean Supreme Court, Claim No. GDAHCV2015/0407 between Keith Mitchell (Claimant) and Grenada Today Limited (By its Liquidator Garvey Louison) and Others (Defendants). the Master, Justice Agnes Actie, ordered as follows:
(1). The application to grant leave to commence the claim against the third named defendant (Grenada Today Limited (By its Liquidator Garvey Louison)) is refused;
(2). The claim form against the third named defendant is struck out;
(3). Summary judgment is granted in favour of the third named defendant on the counterclaim;
(4). The refusal of leave to proceed against the third named defendant will not stop the proceedings against the other defendants.
Accordingly the claim shall be listed for further case management directions; and
(5). Cost to the Liquidator of third named defendant in the sum of $1,500.00.
By way of background, on 19th October 2005, the Claimant/judgment creditor petitioned the court for a winding up order of the third named company/judgment debtor alleging its inability to pay the judgment debt.
The claimant/judgment creditor nominated Garvey Louison as the Liquidator. The court by order dated 27th October 2009 wound up the company appointing Garvey Louison as Liquidator to exercise all his powers pursuant to the Companies Act.
On 16th January 2014 the Claimant applied to the Court for removal and replacement of Garvey Louison as liquidator of the Company. The application was refused with cost in the sum of $2,000.00 to the liquidator.
On 24th September 2015, the Claimant instituted a new claim against the defendants on the ground that to date they have failed or neglected and or refused to make payment to the judgment debt.
The liquidator applied to the Court for summary judgment and striking out of the claim on the ground that the Claimant failed to obtain leave to commence an action against the company in liquidation.
The liquidator also objected to the filing of a fresh action on the ground that Keith Mitchell has failed to satisfy the court’s orders of cost in previous proceedings amounting to EC $3,500.00.
The Claimant applied to the court for retrospective leave to commence his action.
The Court held that in accordance with the Companies Act, leave is required to commence or continue proceedings against a company in liquidation.
The purpose and function of this requirement is to prevent a company in liquidation from being exposed to a multitude of actions, which could be expensive and consuming at the expense of the creditors of the company.
Case Law has established that the claim against the company in liquidation cannot proceed until the leave of the court is obtained.
The Court also observed that the granting of leave is a judicial discretion, which requires the court to consider several factors when deciding whether or not to grant leave.
Mr. Louison represented by Gennilyn Etienne of Excelsior Legal objected to the granting of leave to the claimant on the ground that the claimant is no stranger to the liquidation proceeding as it was the claimant’s application made in 2009 that resulted in the winding up of the company.
In dismissing the claim the court held that the claimant had not met the evidential burden necessary to convince the court to grant leave in retrospect. Thus the claim against the liquidator, Garvey Louison was struck out with cost granted in the sum of $1,500.00.