Law Lords dismiss application of company …”CASE COLLAPSES AGAINST CL FINANCIAL”

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A local company who challenged the decision of the Government to appoint liquidators for CL Financial Limited, has lost its challenge before the Judicial Committee of the Privy Council in London.

Dalco Capital Management Company Limited didn’t even get a chance to argue its case before the Law Lords.

Lords Mance, Hodge and Briggs refused to grant permission to Dalco to challenge the decision of the local Court of Appeal. In their decision, the Lords stated, “Permission to appeal be refused because the application does not raise an arguable point of law of general public importance which ought to be considered by the Judicial Committee at this time and, as the Court of Appeal also confirmed on 30th October 2017, nothing in the reasoning of the earlier Court of Appeal on 25th July 2017 can be treated as conclusive on the points complained of.”

Dalco was challenging the decision of the Court of Appeal dated July 25, 2017, which ruled for the Attorney General for CL Financial to be wound up and liquidators be appointed.

On July 25, 2017, the Court of Appeal comprising Justices Peter Rajkumar, Charmaine Pemberton, and Andre Des Vignes, allowed the appeal of the Attorney General, and set aside the order of  Justice Ramcharan dated July 19, 2017.

They ordered that Hugh Dickson and Marcus Wide of the international accounting firm Grant Thornton, be appointed Joint Provisional Liquidators in relation to CL Financial Limited in order to protect and conserve the assets of CLF and curtail wasteful expenditure and liabilities pending the determination of the winding up petition. CL Financial was owned by Lawrence Duprey.

The Attorney General filed an application to wind up CL Financial. He also sought the appointment of a provisional liquidator in circumstances where it alleged:

a. that the company was unable to pay its debts and should be wound up;

b. that its assets needed to be protected and conserved pending the determination of the winding up petition, and

c. that a change was contemplated in the composition and control of the board of directors of CLF (the board), contrary to the basis on which substantial sums, allegedly in excess of $23 billion, had been advanced by the AG

The trial judge refused to appoint a provisional liquidator and held that the application to do so was premature.

The Appeal Court found that the trial judge was plainly wrong:
a. in misconstruing the evidence, and

b. in not applying the correct legal test (which he had accepted as correct), in relation to dissipation of assets, (a consideration relevant to the appointment of provisional liquidators).

c. the trial judge fell into error in:- i. failing to consider the totality of the evidence before him of the company’s current financial position; ii. in selecting one aspect of that evidence, (the operational loss for 2017), to the exclusion of the totality of that evidence; iii. in misconstruing the effect of the evidence that he did consider; iv. in failing, (despite referring to it), to apply the correct meaning of “dissipation” of assets (in relation to a company continuing to trade after presentation of a winding up petition; v. in applying instead a test for “dissipation “based on the Concise Oxford Dictionary meaning (to waste); and a further test that a serious effect on the assets of the company needed to be demonstrated by the applicant ; vi. in ignoring his own finding as to what was the correct legal meaning of “dissipation”; vii. in any event, in failing to consider and properly apply to the particular current circumstances of CLF any of the tests that he referred to in relation to dissipation of assets, leading to the erroneous conclusion that it was premature in the circumstances to appoint joint provisional liquidators.

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