Royal Fidelity Merchant Bank & Trust (Barbados) Ltd v The Attorney-General
| Jurisdiction | Barbados |
| Judge | Mr. Justice Barry L. Carrington |
| Judgment Date | 07 December 2020 |
| Neutral Citation | BB 2020 HC 63 |
| Court | High Court (Barbados) |
| Docket Number | NO. CV 626 OF 2020 |
| Date | 07 December 2020 |
IN THE SUPREME COURT OF JUDICATURE
HIGH COURT
CIVIL DIVISION
The Honourable Mr. Justice Barry L. Carrington, Judge of the High Court
NO. CV 626 OF 2020
Mr. Andrew Thornhill Q.C., Mr. Khamaal Collymore and Ms. Kimberley P. Knight of George Walton Payne & Co. for the Claimant.
Mr. Roger C. Forde, Q. C. along with Mr. Adrian Cummins Q.C., Mrs. Sherica J. Mohammed-Cumberbatch and Mr. Jason Wilkinson of Carrington & Sealy for the Defendants.
During the course of proceedings, counsel for the Defendants made an oral concession relating to an aspect of the Claimant's case. The concession was included as part of the order of the court which was drafted and approved by the parties. Counsel for the Defendants, while maintaining his position on the concession, has contended that it is not valid.
This matter raises the issue of whether the concession made by counsel for the Defendants on the 20 th day of August 2020 is properly made and if it is, whether it is valid and the Defendants are bound by it.
By a Trusted Deed dated January 7, 2011 between the Second Defendant and the Claimant, the Claimant was appointed Trustee for holders of bonds issued to the Second Defendant for the aggregate principle amount of BDS $80 million, due to mature in 2021. The Second Defendant is a state-owned enterprise of the Government of Barbados. As at the date of the Trust Deed, the Government of Barbados was majority shareholder of the second Defendant. The Second Defendant's bonds (“NPHL bonds”) are secured by an unconditional and irrevocable guarantee issued by the Government of Barbados in favour of the Claimant, which was executed as a deed dated January 22, 2013 between the Government, the Second Defendant and the Claimant.
The Government of Barbados guaranteed that in the event the Second Defendant defaulted in making payments due to bond holders pursuant to the terms of the bonds issued to them by the Second Defendant, then the Government would make the payment to the Claimant as Trustee of the said bond holders.
On September 7, 2018, sometime after the recent elections in Barbados, the newly elected government embarked on an ambitious and comprehensive debt restructuring programme. The debt restructuring included domestic creditors and external debt to commercial creditors. Agreement with domestic creditors was announced by the Prime Minister on October 14, 2018 but the process of reaching agreement with external creditors took somewhat longer, with an agreement with the external creditor committee announced on October 18, 2019.
As a result, the Claimant filed a Claim Form together with a Statement of Claim and accompanied by a Certificate of Urgency seeking a Declaration that the guarantee dated the 22 nd day of January 2013 made between the parties was enforceable.
The Claimant submitted that at the date of the Claim, the principal and interest due under the bonds were still outstanding and the guarantee was not terminated in accordance with its terms or by operation of law.
The Defendants filed their Defence stating inter alia, that the original bonds were no longer valid and that institutions and individuals who held debt instruments were given notice of government's comprehensive debt restructuring which became the subject matter of the Debt Holder (Approval of Debt Restructuring) Act, 2018–24 (“the Act”). The Act became law on October 29, 2018.
The Claimant filed an Application to have certain extracts of paragraphs 11 and 12 of the Defence struck out on the grounds that they amounted to a pre-action admission and were made in bad faith. The extracts are as follows:
“a. Paragraph 11 in its entirety;
b. The part of paragraph 12 which states “in that the consequences of the acceptance of the restructuring proposals by the Instrument Holders as mentioned in paragraph 10 hereof is that the original bonds are no longer valid and ought to be replaced by series D Instruments; and
c. ….”
Paragraphs 11 and 12 of the Defence are important and reproduced here as follows:
“11. In respect of paragraph 7 of the Statement of Claim, the First and Second Defendants deny the allegations contained therein and state that pursuant to section 5(3)(c) of the said Act the Original Bonds, which are the subject matter of the Trust Deed and the Guarantee are no longer valid and ought to be exchanged for Series D Instruments.
12. In respect of paragraph 8 of the Statement of Claim, the First and Second Defendants contend that the NPHL Guarantee has been terminated by operation of law in that the consequence of the acceptance of the restructuring proposals by the Instrument Holder as mentioned in paragraph 10 hereof is the Original Bonds are no longer valid and ought to be replaced by Series D instruments. The First and Second Defendants will further contend that a true interpretation of the said Act is that the said Guarantee has been lifted”.
Section 5(3)(c) of the Act states that
“Where the restructuring proposals are accepted (c) all specified debt instruments received in the exchange shall be deemed discharged and cancelled.”
On the 20 th day of August 2020, when the Application came on for hearing before me, the Defendants revealed that they intended to resist it as there was no bad faith. It was during this hearing that Counsel for the Defendants made the concession that the original bonds were valid. Counsel for the Claimant indicated that in view of the concession, the Claimant was no longer pursuing the Application. The matter was rescheduled for mention on the 11 th day of September 2020.
At this rescheduled hearing, the court made an order reflecting what the parties considered to be the concession made on the 20 th day of August 2020 to the effect that the original bonds between the Claimant and the Second Defendant were valid.
The order was prepared and filed on September 16, 2020 and, so far as is relevant, is in the following terms:
“UPON the Claim herein filed on the 3 rd day of July 2020 and the Claimant's Application herein filed herein on the 18th day of August 2020 for an order striking out parts of the Defence coming on for hearing;
…
AND UPON the Attorneys-at-Law for the Defendants having conceded at today's hearing that the Original Bonds constituted by the Trust Deed dated as of the 7 th day of January 2011 between the Second Defendant of the one part and the Claimant of the other part are valid and subsisting (my emphasis),
-
1. The Defendants be at liberty to file and serve a supplemental witness statement of Ian St. C Carrington on or before the 26 th day of August 2020.
-
2. That Defendants be at liberty to file and serve revised written submissions on or before the 28 th day of August 2020.
-
3. The Claimant be at liberty to file and serve revised written submissions on or before the 4 th day of September 2020.
-
4. The Claimant be at liberty to file and serve, on or before the 28 th day of August 2020, an Affidavit in response to the Application filed herein by the Defendants on the 19 th day of August 2020.
-
5. The determination of costs of the Claimant's Application herein filed on the 18 th day of August 2020 is reserved.
-
6. The matter is adjourned to a date to be fixed.”
There was a dispute about the validity of the concession and the court invited written submissions on the validity and legal consequences of the concession as contained in the order. The matter was heard on September 16, 2020, and it was strongly contended by the Claimant's witness that the original bonds were valid.
Counsel for the Claimant, Mr. Collymore commenced his submissions by asking the question: ‘Can a party resile from a concession made at a case management or a pre-trial conference?’ He answered in the negative and indicated that the cases illustrate how difficult it is to resile from a concession.
Counsel then referred to the case of Ellen Tabitha Rademeyer v Minister of Correctional Services [2008] ZAGPHC 141 (“ Rademeyer”), a decision of the South African High Court. This case dealt with an application which was brought by the first defendant prior to the commencement of the hearing of the action between the parties, in which he sought to resile from a concession made on his behalf at two pre-trial conferences.
The court indicated that three requirements must be met: firstly, the defendant must furnish an explanation sufficiently full of the circumstances under which the concession was made and why it is sought to be withdrawn; secondly, he should satisfy the court as to his bona fides; and thirdly, show that in all the circumstances, justice and fairness would justify the restoration of the status quo ante. It was held that the defendant was not close to satisfying any of those requirements.
Counsel also referred to Leatha Nel v. The Road Accident Fund [2019] ZAGPPHC 456 (19 August 2019) (“ Leatha”), a decision again originating in the High Court of South Africa. The fund sought an order granting leave to resile from a concession it made at a pre-trial conference conceding the merits of the claim brought by Nel. The Judge concluded that for a party to resile from an agreement deliberately reached at a pretrial conference (where the bona fides of the parties are not in issue) special/exceptional circumstances would have to exist. Otherwise, the object of the Rule would be negated if the parties are willy-nilly allowed to retract concessions made at such conferences.
Counsel further submitted that in both Rademeyer and Leatha, supra, the respective defendant made concessions at the pre-trial...
To continue reading
Request your trial