Barrack Construction Ltd v National Housing Corporation
| Jurisdiction | Barbados |
| Judge | Crane-Scott, J. |
| Judgment Date | 08 February 2011 |
| Neutral Citation | BB 2011 HC 11 |
| Docket Number | 2111 of 2006 |
| Court | High Court (Barbados) |
| Date | 08 February 2011 |
High Court
Crane-Scott, J.
2111 of 2006
Sir. Maurice King Q.C. in association with Mr. Adrian King and Mr. Amiri Dear for the defendant/judgment debtor.
Mr. Alrick Scott in association with Sir Richard Cheltenham Q.C. for the plaintiff/judgment creditor.
Civil practice and procedure - Application for stay of execution of writ of fieri facias — Delay — Hardship — Prejudice — Charging order — Whether special circumstances exist which render enforcement of judgment inexpedient by writ of fieri facias.
Crane-Scott, J. This is an application by the National Housing Corporation (“hereinafter sometimes referred to as “the Corporation”) seeking an order for a stay of execution of a writ of fieri facias issued on behalf of Barrack Construction Ltd (“hereinafter sometimes referred to as “the Judgment Creditor” or “Barrack”).
The writ of fieri facias was obtained against the background of an order made by Cornelius, J. on July 18th, 2008 granting leave to Barrack to enforce as a judgment or order of the Court, an arbitral award in its favour, dated and published on September 6th, 2006, together with costs awarded by the Sole Arbitrator, Sir. Denys Williams.
On or about November 14th, 2008 the sum of $2.5 million was paid to the Judgment Creditor on account of the Corporation's indebtedness. Additionally, by letter dated February 4th, 2009, the Prime Minister and Minister of Finance wrote to the Judgment Creditor informing it that the Government of Barbados was committed to meeting its obligations in a timely manner and would attempt to do so in relation to the outstanding debt.
Following the grant of leave to enforce the award, the Judgment Creditor applied pursuant to O. 45, r. 12 RSC for, and on 7th October, 2009 obtained, a writ of fieri facias.
The writ commands the Chief Marshal, inter alia, to (i) seize in execution the Corporation's goods, chattels and other property and (ii) cause to be made the sums of $54,191,076.90 (being the arbitral award with and including interest); $6,287,103.86 (being costs with and inclusive of interest); further interest at the rate of 8% on the arbitral award of costs from the 30th July, 2009 until payment; together with all Marshal's poundage fees, costs and other legal incidental expenses; and immediately following execution to (iii) pay to the Judgment Creditor the amount levied in respect of the arbitral award, interest and costs, including interest on the costs from the date of the order.
The total outstanding debt (inclusive of costs and interest) stated in the writ of fieri facias as at July 30, 2009 was $60,478,180.76 and continues to mount at the annual rate of 8% until payment.
On or about November 25th, 2009, just over a month after obtaining the writ of fieri facias, Sir. Richard Cheltenham, Q.C., the attorney-at-law for the Judgment Creditor, halted action on the writ and requested the Chief Marshal not to proceed with the execution until further advised.
In the interim, the Judgment Creditor pursued an application pursuant to section 33 of the Supreme Court of Judicature Act, Cap. 117A for charging orders against several parcels of land owned by the Corporation. The application in respect of the charging orders came on for hearing on divers dates between November 2009 and January 2010. Ultimately, on January 28th, 2010, the Judgment Creditor obtained a final Charging Order against the Corporation's lands situated at Lodge Hill, St. Michael (“the Warrens Office Complex”) and at Hopeland, St. Philip to secure the Corporation's indebtedness to the Judgment Creditor estimated at the date of the order to exceed $ 60,000,000.00 Barbados dollars with interest accruing daily.
Shortly before the grant of the Charging Order, by letter dated January 22nd, 2010, Counsel for the Judgment Creditor, Sir, Richard Cheltenham Q.C. wrote once again to the Chief Marshal and instructed him to proceed to execute the writ of fieri facias without delay.
Faced with the impending execution of the writ of fieri facias, the Corporation then applied on January 26th, 2010 pursuant to the Rules of the Supreme Court of Judicature Act, 1982 and/or under the inherent jurisdiction of the Court seeking an order for a stay of execution of the writ.
The application for the stay was heard on March 26th, 2010. Counsel for both parties produced written submissions for and against the application and provided the Court with supporting authorities. The Court's decision was reserved following oral arguments.
Basis of the application: The Corporation's application was made pursuant to Order 47 R.S.C. which replicates the provisions of Order 47 of the corresponding English Rules which were in force prior to the commencement of the new English Civil Procedure Rules and provides, inter alia:
- (1) Where a judgment is given or an order made for the payment by any person of money, and the Court is satisfied, on an application made at the time of the judgment or at any time thereafter, by the judgment debtor or other party liable to execution (a) That there are special circumstances that render it inexpedient to enforce the judgment or order, or (b) That the applicant is unable from any cause to pay the money, then, notwithstanding anything in rule 2 or 3, the Court may by Order stay execution of the judgment or order by writ of fieri facias either absolutely or for such period and subject to such conditions as the Court thinks fit… (3) An application made by summons must be supported by an affidavit made by or on behalf of the applicant stating the grounds of the application and the evidence necessary to substantiate them and, in particular, where such application is made on the grounds of the applicant's inability to pay, disclosing his income, the nature and value of any property of his and the amount of any other liabilities of his.”
As required by subsection (3), the “special circumstances” forming the basis of the Corporation's application were set out in the Fourth Affidavit of Lanette Napoleon Young filed on January 26th, 2010 and supplemented by the facts set out in her Fifth, Sixth and Seventh Affidavits filed respectively on March 2nd and 12th, 2010.
The Third and Fourth Affidavits of Alphaeus Barrack opposing the stay were filed respectively on February 25th, 2010 and March 23rd, 2010.
The arguments for and against relief: The main thrust of the Corporation's arguments for the grant of a stay of execution was that having previously sought and obtained a Charging Order over certain of the Corporation's assets, the Judgment Creditor's decision to proceed on the writ of fieri facias would be an abuse of the process of the Court since the charged assets may on current market valuations far exceed the amount of the judgment debt.
Counsel for the Corporation urged the Court to find that the Judgment Creditor's decision to proceed with the writ of fieri facias at this stage of the proceedings was an abuse of process. He submitted that just as had occurred in the case of Robinson v. Bailey [1942] Ch 268, the Judgment Creditor was attempting to use the procedure “to get a lever to force the [Corporation] to comply with its obligation.” [See per Simonds, J. @ p. 271.]
Counsel for the Corporation drew the Court's attention to the Fifth Affidavit of Lanette Napoleon Young filed on March 2nd, 2010. He submitted that the Corporation had clearly established that the National Insurance Board had acknowledged payment in full satisfaction of the Corporation's obligations referred to in paragraph 6 of the Third Affidavit of Alphaeus Barrack filed on February 25, 2010 opposing the stay.
Sir. Maurice King, Q.C. submitted that the Memoranda of Satisfaction exhibited to the Fifth Affidavit of Lanette Napoleon Young, showed that there are now no prior charges in favour of the National Insurance Board over the Corporation's assets subject to the Charging Order which would have the effect of diminishing any funds to which the Judgment Creditor would be entitled in the event of a sale of the charged assets.
He further submitted that as the Judgment Creditor had appealed to the Court of Appeal and had sought, inter alia, variation of the trial judge's decision refusing to include in the Charging Order, the Corporation's Head Office on Reef Road and Country Park Towers on Country Road, the Judgment Creditor was unable to say with any certainty, prior to a decision of the Court of Appeal, upholding or rejecting the Judgment Creditor's appeal, what total assets of the Corporation would ultimately be subject to the Charging Order.
For his part, Counsel for the Judgment Creditor, Mr. Alrick Scott, noted that the Court's jurisdiction under Order 47, r. 1 to grant a stay of execution was discretionary. He submitted that in exercising the discretion, the starting point and the foremost consideration to be borne in mind is that a successful litigant is entitled to the fruits of his judgment and is not to be lightly deprived of the fruits of that judgment except in “special circumstances”. In support of his submissions he cited the cases of Winchester Cigarette Machinery Ltd. v. Payne [1993] WL 963008 and Roberts Petroleum Ltd v. Bernard [1982] 1 W.L.R. 301
Citing dicta from Lord Denning in TC Trustees (JS) (Successors) [1969] 2 Q.B. 295 @ 302, Counsel for the Judgment Creditor submitted that the Court's jurisdiction under O. 47, r. 1 to stay execution proceedings was not unlimited. Nor, he submitted, does the Court have an equitable jurisdiction to grant the stay. According to Mr. Scott, the only basis on which a Court could deprive a creditor of the fruits of his judgment under O. 47, r. 1 was if “special circumstances” were established.
For ‘special circumstances’ to be made out,...
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