The title of a lawsuit concerning a company under liquidation specifies the name of the liquidator and their capacity
In every legal proceeding involving a company under liquidation, its name is mentioned as well as the the name of its liquidator. Mere reference to the name of the company and the fact that it is in liquidation is not sufficient. The court is entitled to know who the liquidator is. In the event that the official receiver is appointed as the liquidator of a company, they are mentioned and their name does not need to be mentioned since their capacity is determined.
The Civil Procedure Rules and specifically O.2 r.3 provides that when the writ of summons is presented for sealing it shall contain, in addition to the other information, the full names of the plaintiff and the defendant, otherwise it shall not be accepted. In any proceeding pending where the issue is raised that the title of the lawsuit does not include the liquidator’s name, it is necessary to file an application to amend the title and add it for purposes of procedural completeness and substantive law.
The Supreme Court in a judgment issued in C.A. E66/2020, dated January 12, allowed the appeal of a company under liquidation for the purpose of setting aside an order of the trial court and replacing it with a similar one, in which the name of the liquidator is mentioned. Specifically, the trial judge while making an order amending the lawsuit title in the writ of summons and in any other filed pleading or application by striking out the name of the company and substituting its name while stating that it is in liquidation through its liquidator, did not order the addition of the name of the liquidator.
Article 228 of the Companies Law, Cap. 113, as the Supreme Court pointed out, provides who shall be the liquidator of a company for which a liquidation order is issued. Where no liquidator is appointed by creditors, the official receiver is the liquidator. The relevant provision was applied in this case in the initial stage and subsequently they resigned and a specific person was appointed in their place. The amendment was made in order to include in the title the new name of the company, now under the authority of its liquidator. However, it was incomplete, without the name of the liquidator. Therefore, there was no one the court could turn to when needing to communicate with the company.
The Supreme Court added that Article 228 (f) leaves no doubt the name of the liquidator of a company must form part of its name in the lawsuit title. This makes sense, so everyone involved in the company’s affairs, including the court, knows who it representing it. And on the basis of the provision of Article 223(1)(a) of Cap.113, it held that it is in the name of the company that the liquidator must bring any legal proceedings and act on behalf of the company. It is not proper for that person to remain unknown. This position is supported by O.2 r.3 which provides that when a writ of summons for sealing is presented it must include, inter alia, the name of the plaintiff and the defendant. Where a particular party named in the summons is represented by a representative, the representative’s name must be mentioned after theirs, since they are not a party to the proceedings.
The court concluded that the identity of a person appearing as a representative of a party in legal proceedings must necessarily be stated in the title of the lawsuit in the writ of summons. This is in order to safeguard the interests of the person represented, both from a procedural point of view and from a substantive law point of view. In the context of the above, the need to ensure transparency and judicial procedure is served. This also applies in the case of a company in liquidation which loses its autonomy.
George Coucounis is a lawyer practicing in Larnaca and founder of George Coucounis LLC, Advocates & Legal Consultants, [email protected]