Clearwater Bay Ltd v Blue Developments Ltd
Jurisdiction | Barbados |
Judge | Mr. Justice William Chandler |
Judgment Date | 31 August 2021 |
Neutral Citation | BB 2021 HC 34 |
Docket Number | CV 420 of 2021 |
Court | High Court (Barbados) |
IN THE SUPREME COURT OF JUDICATURE
HIGH COURT
CIVIL JURISDICTION
the Honourable Mr. Justice William Chandler, Judge of the High Court
CV 420 of 2021
In the Matter of the Companies Act Chapter 308 of the Laws of Barbados
And in the Matter of Clearwater Bay Limited, Company Number 33533
And in the Matter of the extension of time for the registration of a Debenture and Mortgage by Way of Legal Charge
Mr. Andrew V. Thornhill QC, Ms. Shaddiah Hinds with him of Messrs. George Walton Payne & Co. Attorneys-at-Law for the Claimants.
Mr. BLV Gale QC, Mrs. Laura Harvey-Reade with him for the Defendant.
Application to register two charges out of time — Sections 237 and 248 of the Companies Act Chapter 308 — Whether it is just and equitable to allow registration out of time — Alleged prejudice to chargor. Alleged non-compliance with maxims of equity. He who seeks equity must do equity. He who comes to equity must come with clean hands. Delay defeats equity — whether Claimant in breach of duty of full disclosure.
This is an application for an extension of time within which to register a debenture and mortgage over property situate at Paradise Beach, St. Michael (the Paradise Lands) under section 248 of the Companies Act Chapter 308 of the Laws of Barbados (Cap. 308). The application is opposed by the Defendant which executed the debenture and mortgage in favour of the Claimant. The Claimant executed a conveyance of the lands to the Defendant contemporaneously with the debenture and mortgage.
The Claimant is a company wholly owned by the Government of Barbados while the Defendant is a private limited liability company registered under Cap. 308.
The application is by Fixed Date Claim form filed 8 June 2021 seeking the following:
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(1) An Order pursuant to section 248 of the Companies Act, Chapter 308 of the Laws of Barbados (the “ Companies Act”) that the period for the registration of the undated Debenture made between the Defendant of the One Part and the Claimant of the Other Part charging Lots A and B Paradise Lands to secure the sum of BDS $58,000,000.00 be extended to thirty days from the date of the Order to be made herein.
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(2) An Order pursuant to section 248 of the Companies Act that the period for the registration of the undated Mortgage made between the Defendant of the One Part and the Claimant of the Other Part charging firstly 47,659 square metres of land and secondly 957.0 square metres of land situate at Paradise Beach, Black Rock, St. Michael be extended to thirty days from the date of the Order to be made herein.
The application is supported by an affidavit filed on even date with the application sworn to by Ms. Nancy Headley (the Headley affidavit) of the Ministry of Finance, Economic Affairs and Investment whose office is situate at Government Headquarters, Bay Street Saint Michael. Ms. Headley is one of the directors of the Claimant. Ms. Headley deposed, inter alia, that:
Finally, she deposed that she believed that it would be just and equitable for the Court to grant an order under Section 248 of Cap. 308, extending the time for registration of the Debenture and Mortgage for 30 days from the date of the order of Court.
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a. In or around 2016, the Claimant sold certain lands situate at Paradise Beach, Black Rock Saint Michael firstly containing an aggregate area of 47,659.3 square metres (Lot A) and secondly 128, 025.0 square metres sorry 76,680.0 square metres also situate at Paradise Beach, Black Rock, Saint Michael (Lot B) to the Defendant for the sum of 59 million dollars United States currency.
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b. The Defendant did not pay the purchase price but it was agreed that the debenture and mortgage charging the Paradise Lands would be executed to secure payment of the purchase price.
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c. An undated debenture (the Debenture) was executed by the parties on the same day as the conveyance by virtue of which the Defendant charged by way of a first legal mortgage and as a continuing security for repayment of the sum of BDS 50 million dollars being part of the purchase price all its estate and interest in lots A and B together with all present and future buildings, fixtures, plant and machinery which are [sic] at any time on the said property.
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d. On the same date, after executing the conveyance (the conveyance) and the debenture, the parties executed an undated Deed of Charge by Way of Legal Mortgage (the Mortgage) by virtue of which the Defendant charged to the Claimant as a second legal mortgage and as a continuing security for repayment of the other part of the purchase price or BDS 60 million dollars all their estate and interest in 47,659.3 square metres of land and being the Lot lettered B and secondly a parcel of land containing 957.40 square metres of land also situate at Paradise Beach, Black Rock, Saint Michael.
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e. Following the execution of the Debenture and Mortgage these documents were delivered to the law firm of Clarke, Gittens & Farmer, attorneys-at-law.
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f. The Debenture and Mortgage were being held in escrow pending applications by the Defendant to the central Bank of Barbados for certain approvals and exemptions with respect to exchange control and also pending applications to the Ministry of Finance and Economic Affairs for fiscal concessions relating to the development of lots A and B.
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g. Following the outcome of these applications the documents were to be delivered to Mr. M Adrian King QC, the then attorney-at-law for the Claimant.
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h. She had been advised by her current Attorney-at-law and verily believed that, pursuant to Section 237 of Cap. 308, the Debenture and Mortgage should have been lodged with the Registrar of Companies (the Registrar) within 28 days of their creation.
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i. She had also been advised that the Debenture and Mortgage are presently void and cannot be presented to the Registrar without an order of Court granting an extension of time.
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j. To date, the Claimant had not received any of the purchase price, nor had the Defendant settled the land tax due and owing for the period following the execution of the conveyance. With respect to Lot A, the outstanding land tax plus arrears owed to the Barbados Revenue Authority (BRA) totalled $1,288,973.65, whilst the outstanding land tax plus arrears in respect of Lot B totalled $573,550.00 at the date of swearing the affidavit.
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k. The Claimant was desirous of perfecting its security so as to enforce the same.
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l. She had been informed by her attorneys-at-law that, from searches conducted, no charges had been made and/or registered against the Defendant. She therefore believed, that the omission to register the mortgage and debenture, was not of a nature to adversely affect the position of creditors or shareholders of the Defendant.
After service of the claim on the Defendant, Mr. Philip Tempro, a Director of the Defendant company, filed an affidavit on 25 June 2021, in opposition to the application (the Tempro affidavit), attaching a copy of an undated agreement between the Defendant and the Claimant (the Agreement). We reproduce the relevant parts of that agreement here since it is crucial to an understanding of the Tempro affidavit and the Defendant's submissions.
“BARBADOS
THIS AGREEMENT (“this Agreement”) is made as of the day of
2016 BETWEEN:
(1) BLUE DEVELOPMENTS LIMITED a company incorporated and registered under the provisions of the Companies Cap, 308 of the Laws of Barbados as company no. 39858 and having its registered office situate at Port St. Charles, Heywoods, St. Peter, Barbados (hereinafter called the “the Company” which expression shall where the context so admits include successors and assigns) OF THE ONE PART;
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(2) CLEARWATER BAY LIMITED a company incorporated and registered under the provisions of the Companies Act, Cap, 308 of the Laws of Barbados as company no. 33533 and having its registered office situate at The Ministry of Finance, Government Headquarters, Bay Street in the parish of St. Michael in this Island (hereinafter called “Clearwater”) OF THE OTHER PART.
WHEREAS:
A. The Company is or will be the owner of the property described in Part A and B Schedule 1 (together the “Property”).
B. The Company has purchased the Property to market it to investors (an “Investor”) for the purposes of developing it as a luxury hotel and private residential development (‘the Development’). The Development will include the design, construction, development, operation and sale, of a luxury resort and residential development comprising: (i) a luxury hotel together with all associated amenities including pools, a spa, restaurants, shopping, tennis and water sports facilities to be constructed on a portion of the Property (“the Hotel”), and (ii) luxury private residences to be constructed on a portion of the Property (“the Private Residences”).
C. For the purposes of this Agreement, each of the following is referred to as a “Transfer”: (i) the Company will sell the Property to an Investor; or (ii) the Company will be sold to an Investor; (iii) the holding company of the Company (“Holdco”) will be sold to an Investor; or (iv) an Investor will subscribe for shares in Holdco or the Company (an “Investor Subscription”),
NOW THEREFORE, in consideration of the mutual Agreements contained in this Agreement it is agreed as follows;
1. Clearwater hereby agrees, with the Company and in consideration of, inter alia, the Company purchasing the Property, as follows:
a. The Company shall grant to Clearwater:
(i) a debenture over all of the assets of the Company including the Property in the maximum sum of BDS $58 million (fifty-eight million Barbados dollars) (“Debenture A”); and
(ii) a deed of charge by way of second legal...
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