Colonial Life Insurance-Company (Trinidad) Ltd et Al v Toppin
| Jurisdiction | Barbados |
| Judge | Kentish, J. |
| Judgment Date | 09 June 2004 |
| Neutral Citation | BB 2004 HC 12 |
| Docket Number | 1552 of 2002 |
| Court | High Court (Barbados) |
| Date | 09 June 2004 |
High Court
Kentish, J.
1552 of 2002
Mr. Leslie F. Haynes, Q.C. in association with Mr. Woodbine Davis Q.C.; and Ms. Karen Culbard for the plaintiffs.
Mr. Alair P. Shepherd, Q. C. in association with Mr. Adrian King and Ms. Wendy Maraj for the defendant.
Company Law - Receiver Financial Statements — Whether defendant/receiver was relieved of the duty to prepare financial statements of his administration — Whether the plaintiffs were interested persons so as to entitle them to relief — Companies Act, s.283.
By an amended originating summons (the application”) filed on 16 July, 2002 the plaintiffs sought the following orders:–
1. A declaration that the first and/or second plaintiffs are, by reason of the matters set out in the Schedule to the application, interested persons within the provisions of the Companies Act Cap. 308 of the Laws of Barbados (“the Companies Act”), section 282 thereof;
2. A declaration that the documents caused to be filed with the Registrar of Corporate Affairs and Intellectual Property “the Registrar” on the first day of March, 1999 as “Financial Statements” showing only Details of Receipts and Payments of Plantations in Receivership for the years ended March 8, 1995, 1996 and 1997 do not comprise Financial Statements as required by section 283(f) of the Companies Act;
3. The defendant, in his capacity as Receiver/Manager of Plantations do, in accordance with section 283 of the Companies Act, cause to be prepared and filed with the Registrar, Financial Statements of his administration in accordance with his duties as such receiver/Manager for the years ended March 8, 1995, 1996, 1997, 1998, 1999, 2000, 2001 and 2002;
4. That such Financial Statements as may be ordered to be filed shall include not only receipts and payments for the particular year but a statement of all property of which the defendant as Receiver/Manager of Plantations has taken possession, control, sold or realised and any other significant information about the operation of Receivership;
5. The defendant as Receiver/Manager of Plantations do furnish the plaintiffs with a list of all assets which the defendant has taken possession and control of and which assets are not yet sold, realised or otherwise disposed of;
6. The defendant as Receiver/Manager of Plantations do furnish the plaintiffs with a statement of all current liabilities including but not limited to the current indebtedness of Plantations to the Royal Bank of Canada;
7. Costs.
8. Such further or other relief as the Court deems fit.
The application is supported by an affidavit (Affidavit No. 1) of Leroy Parris Director and Chief Executive Officer of the second plaintiff filed on 16 July, 2002. In the course of the proceedings additional affidavits were filed on behalf of the plaintiffs and in turn affidavits in response and in opposition thereto were filed on behalf of the defendant.
The first plaintiff is a company established under the laws of Trinidad and Tobago and registered in Barbados under the provisions of the Companies Act with an established place of business at White Park Road, in the city of Bridgetown.
The second plaintiff is a company registered and continued under the provisions of the said Companies Act with its registered office also at White Park Road in the City of Bridgetown.
The defendant, a chartered Accountant and the managing partner of the firm of Toppin, Walker & Co. was appointed as Receiver-Manager of Plantations Holding Limited (“Plantations”) on the 8 March 1994 by Royal Bank of Canada (RBC) pursuant to a debenture/mortgage (“the debenture”) made between Plantations as mortgagor and the RBC as mortgagee.
The following questions arise for determination by the Court:–
- Whether the plaintiffs are “interested persons” within the meaning of s. 282 of the Companies Act so as to entitle them to the relief claimed in the application. 2. Is the defendant relieved of the duty imposed by s.283(f) and (h) of the Companies Act to prepare financial statements of his administration and file with the Registrar of Companies a copy thereof on the ground that neither the intervals at which such financial statements should be prepared nor the form of such financial statements has been prescribed as required by s. 283 (f); and 3. If not, does the Court have power to prescribe the intervals and the form of the financial statements? And, if so, what are the appropriate form and content of such financial statements and the appropriate intervals at which such financial statements should be prepared?
Important questions of law are raised in the application about the statutory duty of a receiver or receiver-manager to file financial statements and the power of the Court to issue directions relating to the duties of a receiver or a receiver-manager. An interpretation of certain sections of the Companies Act is required to determine these questions. However, before I turn to deal with these questions as formulated it is necessary to outline the background to the application and the context within which the application was made.
The undisputed facts are contained in the affidavits filed in support of and is opposition to the application on behalf of the plaintiffs and the defendant respectively.
The second plaintiff is a wholly owned subsidiary of the first plaintiff which according to the plaintiffs owns 3,996,463 shares, but according to the defendant, owns 3,827,430 shares in Plantations. Nothing turns on this discrepancy.
On the 22 July 1992, the second plaintiff guaranteed payment to RBC in the sum of $4.4 million dollars and interest thereon. This sum represented only a part of the total indebtedness then owed by Plantations to RBC and which was secured under the debenture.
Following his appointment as receiver-manager the defendant in the course of his receivership sold from time to time assets of Plantations for the purpose of liquidating the debt due to RBC.
On 23 September, 1998 RBC, having sued under the guarantee, obtained a judgment in the High Court against the second plaintiff in the sum of $4.4 million dollars together with interest thereon and costs. This judgment was confirmed by the Court of Appeal on 19 July 2001.
By letter dated 30 May, 2003 the first plaintiff, acting by its attorney-at-law Mr. Leslie Haynes, Q.C., wrote to the defendant requesting that the first plaintiff be allowed to inspect the account of the defendant's administration on the basis that the first plaintiff was an interested person. To this letter there was and has been no reply.
In their quest to obtain information of the payments made by Plantations to RBC, the plaintiffs caused searches to be made at the Corporate Affairs and Intellectual Property Office (“Corporate Affairs”) to ascertain whether a Statement of Affairs was filed by the defendant with the Registrar as required by section 286(1) of the Companies Act.
These searches revealed that:–
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(a) on 1 March 1999 a document called “Details of receipts and payments (referred to in the Affidavit No.1 of Leroy Parris and the certificate of the Deputy Registrar, Corporate Affairs dated 5 June, 2002 as “financial statements” and to which I will return) was filed at Corporate Affairs for each of the years 1995 to 1997 inclusive;
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(b) a statement of affairs was filed at Corporate Affairs on 23 June 1999; and
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(c) Up to 4 July 2002 no further “financial statements” were filed at Corporate Affairs after those filed on 1st March 1999;
Having failed in their quest to obtain the information sought from the receiver-manager, the plaintiffs filed this application on 16 July 2002 seeking the relief therein set out.
Up to filing of the application on 16 July, 2002 the second plaintiff was still disputing its liability to RBC under the guarantee and had obtained conditional leave to appeal to the Privy Council against the decision of the Court of Appeal earlier referred to.
The second plaintiff failed to comply with the conditions under which leave was granted to appeal to the Privy Council and its application to be allowed to comply with these conditions was dismissed by the Court of Appeal on 31 July 2002 after the filing of this application.
Nevertheless the second plaintiff could have sought leave directly from the Privy Council to appeal but this was not pursued up to the conclusion of the hearing of the application on 18 February 2003.
By letter dated 13th August 2002 the second plaintiff acting through another of its attorneys-at-law, Dr. Richard L. Cheltenham Q.C. wrote to Mr. Hal Gollop, attorney-at-law for RBC enclosing a cheque drawn on Dr. Cheltenham's clients’ account in the sum of $7 739 318.22 and advising that:
“the amount being paid is subject to verification of the amount due from Clico Holdings (Barbados) Ltd…. The implications of this are as follows: if the amount here being paid is found to have fallen short of what is properly due to Royal Bank, my client will make good the short fall. If, however, Royal Bank of Canada Bank has been overpaid it is likewise expected that the amount of the overpayment plus interest will be repaid.”
By letter dated 15 August, 2002 RBC through its attorney-at-law, Mr. Gollop wrote to Dr. Cheltenham Q.C. enclosing his clients’ cheque in the sum of $1 701 299.56 being a refund of the interest overpaid by Dr. Cheltenham in his cheque of $7 739 318.22.
This overpayment resulted from the calculation of the amount of indebtedness due by the second plaintiff under the guarantee conveyed by Mr. Gollop to Dr. Cheltenham by letter dated 23 July 2002 which stated the amount due to RBC as $7,739,318.22.
Such was the background when this...
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