Nanette Annelise Hollis v Alexis Anthony Leach
| Jurisdiction | Barbados |
| Judge | Mr. Justice Barry L. Carrington |
| Judgment Date | 12 October 2021 |
| Neutral Citation | BB 2021 HC 039 |
| Docket Number | NO. CV 1492 OF 2019 |
| Court | High Court (Barbados) |
IN THE SUPREME COURT OF JUDICATURE
HIGH COURT
CIVIL DIVISION
The Honourable Mr. Justice Barry L. Carrington, Judge of the High Court.
NO. CV 1492 OF 2019
Ms. Paula S. Jemmott, Attorney-at-Law for the Claimant.
Mrs. Peta-Gay Lee-Brace, Attorney-at-Law for the Defendant
This is an interesting matter that was commenced on a Certificate of Urgency. There are three (3) applications before the court namely,
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(i) a claim filed by the Claimant for the payment of a sum of money due and owing as a result of a loan agreement,
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(ii) an application for summary judgment relating to the said claim, which was filed contemporaneously with the claim, and
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(iii) an application by the Defendant to strike out the Statement of Case as disclosing no cause of action against the Defendant.
Two (2) companies, Caribrokers St. Lucia Ltd. (“Caribrokers”) and West Indies Properties Ltd. (“West Indies Properties”) executed a written agreement where Caribrokers loaned a sum of money to West Indies Properties to buy a property in Barbados. The loan agreement provided for a payment plan and specified that should West Indies Properties default in any of its payments the entire loan would immediately become due.
West Indies Properties defaulted on its repayment schedule and Caribrokers sought payment in full. A formal demand for payment was made and when it was not honoured, the Claimant, a director of Caribrokers commenced proceedings in her personal capacity against the Defendant as director of West Indies Properties in his personal capacity, for summary judgment of the entire amount, interest and costs. The Defendant challenged the summary judgment application and filed an application to strike out the statement of case indicating that the proper parties to the action are the companies that entered the agreement and not the directors.
The Claimant alleged that she was fraudulently induced by the Defendant to lend West Indies Properties the money from her company Caribrokers, and he prepared an agreement to that effect. The Claimant has urged the court to lift the corporate veil and hold the Defendant personally liable for the loan.
Ms. Nanette Hollis (“the Claimant”) who resides in the United Kingdom is a director of the company Caribrokers St. Lucia Ltd. (“Caribrokers”). Mr. Alexis Leach (“the Defendant”) resides in Barbados and is the director of the company known as West Indies Properties Ltd. (“West Indies Properties”).
By a Written Agreement dated the 26 th day of September 2016, Caribrokers loaned West Indies Properties a sum of money for the purchase of a property at No.l Mango Court, Porters St. James. Critical parts of the Agreement are highlighted as follows:
“LOAN AGREEMENT dated this 26 day of September 2016
1. Parties
(1) CARIBROKERS ST. LUCIA LIMITED a company duly incorporated under the laws of Saint Lucia, whose registered office is situated at PKF Corporate Services Ltd., Meridian Place, Choc Bay, Castries, Saint Lucia, acting herein and represented by John Wendell Skeete, Director of the company and duly authorized to act.
(2) WEST INDIES PROPERTIES LIMITED, a company duly incorporated under the laws of St. Lucia, whose registered office is situated at PKF Corporate Services Ltd., Meridian Place, Choc Bay, Castries, Saint Lucia, acting herein and represented by Alex Leach, Director of the company and duly authorized to act.
2. Definitions
…
“Lender” CARIBROKERS ST. LUCIA LIMITED
“Loan” Five hundred and twenty thousand United States Dollars (US$520,000.00)
“Property” The property situated at No. 1 Mango Court, Holetown, St. James, Barbados
3. Recitals
3.1 The Borrower wishes to purchase the Property and has requested that the lender make the Loan to it to assist with the Purchase.
3.2 The Lender has agreed to make the Loan to the Borrower provided that the Borrower agrees to the terms and conditions set out in this Loan Agreement.
3.3 The Borrower has agreed to accept and repay the Loan together with interest by annual payments of THIRTY-ONE THOUSAND
AND TWO HUNDRED UNITED STATES DOLLARS (US$31,200.00) commencing 31 December 2017 and continuing thereafter annually with the full balance payable at the end of the term.
5. Termination
5.1 If the Borrower is in breach of any of the provisions of the Agreement the Lender reserves the right to call in the Loan together with interest which shall continue to accrue until payment….”
6. General Provisions
6.2 Any notice required to be served hereunder shall be given by personal delivery or by sending the same by mail to the respective registered offices or principal place of business for the time being of the Borrower and the Lender and notice so given shall be deemed served 72 hours after it has been posted.
Signed for and on behalf of:
The Lender
(Unrecognizable signature)
Company Seal Affixed
Director
Caribrokers St. Lucia Limited
The Borrower
(Unrecognizable signature)
Company Seal Affixed
Director
West Indies Properties Limited
It was initially agreed that the sum of US$520,000 would be loaned, however, the amount was increased to US$531,895.31 by way of a verbal agreement. The agreed sum was disbursed in four (4) unequal instalments as shown in the letter attached to the Claimant's Amended Statement of Claim from “BoslilBank” and addressed to “Nanette Anneliese Hollis, and signed by “David Sookwa”, Vice President Operations. It is very instructive, and the contents are reproduced below, as follows:
“Dear Ms. Hollis,
We confirm that the following transactions were executed on the mentioned dates for the stated amounts:
• June 13th, 2016
Caribrokers St. Lucia Limited to Alex Anthony Leach-US$23,000.00
• September 04th, 2016
Caribrokers St. Lucia Limited to West Indies Properties-US$61,995.00
• March 22nd, 2017
Caribrokers St. Lucia Limited to West Indies Properties-US$442,000.00
• September 12th, 2016
Nanette Anneliese Hollis to Anthony Leach-US$4,900.00”
West Indies Properties defaulted in meeting its loan obligations and Caribrokers by means of informal and formal demands made attempts to recover the outstanding balance but that proved futile.
The Claimant instituted proceedings via Claim Form accompanied by Statement of Claim on a Certificate of Urgency seeking inter alia, the repayment of the sum of US$531,895.31 from the Defendant together with interest at the rate of 6% per annum. In addition, the Claimant has also filed an Application for Summary Judgment to be entered in favour of the Claimant pursuant to Part 15 of the Supreme Court ( Civil Procedure) Rules, 2008 on the ground that the Defendant has no real prospect of successfully defending the claim or issue. The summary judgment application was filed contemporaneously with the Statement of Case.
The Defendant filed an application to strike out the Statement of Case in its entirety pursuant to Part 263(3)(b) and the sole ground of the application is that neither the Claimant nor the Defendant are parties to the Loan Agreement.
The issue to be determined in this matter, notwithstanding the summary judgment application is whether the Statement of Case should be struck out in its entirety.
Ms. Paula Jemmott for the Claimant argued that the Defendant has no real prospect of success and referenced Rule 15.2 of the Supreme Court ( Civil Procedure) Rules, 2008 and the cases of Swain v. Hillman [2001] 1 ALL ER 91, CA, Three Rivers District Council v. Bank of England (no.3) [2001] 2 ALL ER and Bank of Bermuda Ltd. v. Pentium (BVI Civil Appeal No. 14 of 2003).
Counsel argued that the Defendant has produced nothing at all to oppose the claim against him, the only response being that the Claimant's claim is not against him but a company. Counsel argued that it was the Defendant and not the company who owes a debt to the Claimant. Counsel further argued that the court, taking into account the mere façade test, should look at the Defendant's conduct and lift the veil of incorporation.
Counsel for the Defendant, Mrs. Peta-Gay Lee-Brace referred to the House of Lords decision of Salomon v Salomon & Co. Ltd. [1894] AC 22 and contended that this case establishes not only that a company has a separate personality in law but that the principle of corporate personality applies whether a company is owned by many persons or only by one person.
Counsel further contended that the Loan Agreement was made between two duly incorporated companies: Caribrokers St. Lucia Ltd. and West Indies Properties Ltd. and neither Claimant nor Defendant were parties to this Agreement as it was not made in their personal capacity.
Counsel relied on several authorities including Persad v Singh [2017] UKPC 32 as well as a decision stemming out of the High Court of Barbados in which Chandler J pronounced judgment: St. Clair v. Edwards, Marshal and Harewood (unreported) Civ. Suit No.1787 of 2014.
Mrs. Lee-Brace argued that there is no evidence to support piercing the corporate veil, contending that the fact that one person solely controls a company is not a sufficient ground for piercing the corporate veil. Counsel avers that the Claimant does not plead fraud or any other basis on which the corporate veil can be pierced.
Counsel argued that the Claimant's pleadings reveal no cause of action between the parties, is incurably defective and cannot be sustained. Moreover, Counsel indicated that the pleadings are an abuse of process of the court and ought to be struck out.
Further, Counsel asserted that the Claimant's claim should be struck out pursuant to Rule 26.3 of the CPR since the wrong party or parties have been brought before...
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