CD Consult Ltd v Denise Harding
| Jurisdiction | Barbados |
| Judge | Master Deborah Holder |
| Judgment Date | 27 October 2022 |
| Neutral Citation | BB 2022 HC 42 |
| Docket Number | Civil Suit No. CV309 of 2017 |
| Court | High Court (Barbados) |
| Year | 2022 |
IN THE SUPREME COURT OF JUDICATURE
HIGH COURT
CIVIL DIVISION
Before Master Deborah Holder, BSS, Master of the High Court
Civil Suit No. CV309 of 2017
Ms. Wendy Maraj, Attorney-at-Law for the Claimant
Mr. Lalu Hanuman, Attorney-at-Law for the Defendants
By notice of Application filed on 4 th September 2017 the Defendants have asked the court for “an order that the Claimant pays security for costs in the sum of $30,000 and the costs of this application in the sum of $1,500” and that these proceedings be stayed until such time as security for costs is provided. They have also asked that the Claimant's case be struck out if security for costs is not paid.
Rules 24.2 and 24.3 of the Supreme Court ( Civil Procedure) Rules 2008 (CPR) govern an application for order for security for costs.
The Defendants' affidavit in support was filed on 4 th September, 2017. It was affirmed by the First Defendant and it was made in her personal capacity and in her capacity as Director of Melden Inc. She said that to the best of her knowledge, the Claimant did not have any assets in this jurisdiction and its Director did not reside in Barbados. She believed that the Claimant would be unable to pay the Defendants' costs if ordered to do so. She said that she should not have been sued in her personal capacity as any contract made with the Claimant was done in her capacity as Director of Melden Inc., so she was personally incurring unnecessary legal costs. She was of the opinion that the claim was devoid of merit and she did not want to incur any further legal costs without the certainty of recovering the same when her defence is proved.
According to the Statement of Claim which was filed on 3 rd March 2017, the Claimant is a BVI Business Company with registered offices at Road Town, Tortola, BVI. The Claimant carried on the business of construction management, project management and development consultant services throughout the Caribbean.
The First Defendant is a principal and director of the Second Defendant with authority to negotiate and enter agreements on behalf of the Second Defendant. The Second Defendant is a company, registered under the Companies Act Cap. 308 of the Laws of Barbados with registered offices at Atlantic Shores, Christ Church.
At all material times the “Defendants were engaged upon the construction of townhouses/condominium units at Enterprise, Christ Church.”
On 2 nd June 2008 the Claimant and the Defendants entered into a project management agreement for the Claimant to carry out certain work. The terms of engagement and the conditions under which the work would be carried out, the date of commencement and completion were agreed.
The parties further agreed that the work would be carried out under the Claimant's Terms and Conditions, a copy of which was supplied to the Defendants by e-mail on 27 th June 2007. The First Defendant instructed the Claimant to draw up a Building Contract with the Claimant's building contractor, Norgrove Construction Inc. The latter left the worksite around December 2008 due to non payment and then abandoned it completely. The Claimant remained on the project assisting the Defendants to obtain finance and also to carry out certain work. In breach of the agreement the Defendants did not pay the amounts agreed.
The Claimant alleged that the Defendants refused its request to settle the matter amicably in accordance with pre-action protocols. It claimed the sums due and owing and interest at the agreed rate or alternatively pursuant to section 35 of the Supreme Court of Judicature Act Cap. 117A.
The Defendants filed their Defence on 12 th June 2017. They said that the agreement was made with the Second Defendant only and not the First Defendant who at all times acted as Director of Melden Inc. They admitted, denied and put the Claimant to strict proof on certain aspects of the facts alleged in the Statement of Claim. The Defendants stated that the only agreement signed and agreed to was the Project Management Memorandum of Agreement. They denied that they agreed to the “Claimant's Terms and Conditions”. They provided their version of what transpired after the work was stopped.
The Defendants denied that the debt was owed to the Claimant, they gave their reason for this position and stated that the Claimant's calculation was wrong. The Defendants alleged that certain monies were paid to Mr. Ian Rollitt, Director of the Claimant, who also became a Director of the Second Defendant.
The affidavit of Ian William Rollitt was filed on 28 th March 2018. He deposed that he was managing director and sole shareholder of the Claimant. He was appointed a director of the Second Defendant on 1 st June 2010 but had resigned from the company years ago.
He said that by resolution made on 1 st day April 2011 it was agreed that subject to certain terms and conditions, one of the condominiums would be conveyed to him at the end of the construction of the condominiums. The company never claimed that he was unable or unwilling to fulfil his financial obligations pursuant to the agreement and therefore there was no basis for the Defendants' refusal to convey the unit to him.
It was further agreed that he would be issued with 300 common shares in the company, payment for which could be made by way of the provision of professional services to the company. The directors determined the consideration of the shares to be $120,000.00. He rendered professional services to the company and it was his position that the company was holding the 300 shares which were not issued to him.
Mr. Rollitt deposed that the condominium unit and the 300 shares were due and owing to him by the Second Defendant. He was advised and verily believed that the First Defendant is a Director and shareholder in the Second Defendant and had some measure of control over the affairs of the company.
He admitted that the Claimant was not able to secure $30,000 costs on its own as it was in a financially difficult position because the Defendants owed it funds as well as other parties unrelated to these proceedings. He said:
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“9. As a means of securing those costs I have agreed to give the first and second defendants a charge/security (in terms to be agreed) over the shares and condominium unit owed to me by the second defendant in order to satisfy any costs order upon conclusion of this matter. The value of those shares and/or the condominium unit will far exceed any order for costs that the defendants could possibly obtain from this Honourable Court.
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10. I further agree to execute such charge/security in such form as is agreeable in order to enable the defendants to give effect to an order for costs should the need arise.”
The deponent concluded that the Claimant would fully be able to satisfy any obligation in respect of costs if called upon to do so. Consequently, he asked the court to refuse to order security for costs as the Defendants had the means to recover their costs.
Mr. Hanuman submitted that the defendant's application for security for costs met the criteria set out under Rule 24.3(a) and (b) of the CPR. The Claimant is an external company and its director had been off the island since 2017 and therefore is not ordinarily resident here. This, he argued, was not disputed. Further it was admitted that the Claimant had no assets in Barbados. Consequently, he submitted that the Defendants should be eligible for security for costs.
He contended that the First Defendant was not personally involved in this matter and that she should not have been a party to this matter. It would be unjust for her to be saddled with costs which she could not recover, in the very likely event of her winning.
He argued that no debt was owed to the Claimant, its case was non existent. He noted that the Claimant admitted that it could not pay costs. In this regard he referred to paragraph 8 of Mr. Rollitt's affidavit where he said:
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“8. The defendants have made an application for security for costs in the sum of $30,000.00. The claimant is not able to secure those costs on its own as it is in a financially difficult position due to funds owing to it by the defendants and other parties unrelated to these proceedings.”
Mr. Hanuman dismissed the Claimant's proposal as ludicrous. He reasoned that the Claimant was proposing that in the event that it loses it would give what was lost as payment to the Defendant. He argued that this was not permitted by paragraph 14.3 of the Project Management Memorandum of Agreement and Conditions of Engagement which dealt with Settlement of Disputes.
He contended that this matter should not be before the court. Either party could refer the matter to arbitration. If the Claimant sent a pre-action letter and got no response, then it should have started the arbitration process.
Mr. Hanuman questioned the validity of the notarial certificate on the Claimant's affidavit. Mr. Rollitt's affidavit was sworn before a Notary Public in the United Kingdom on 22 nd March 2018. He said that it was not properly filled in by the Notary Public because it was not dated or signed by him.
Ms. Maraj submitted that the court should consider the point in limine before allowing the Defendant to proceed with its application. She submitted that the Defendant failed to attach a Certificate of Truth to the Notice of Application as required by the CPR. This was based on Rule 3.12(1) which requires that every statement of case be verified by a certificate of truth and Rule 2.3 which defines a statement of case as including an application. Rule 11.3 provides that an application must be in Form 10.
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