[1] Aquaduct Ltd [2] Bertille Da Silva Appellants v [1] Faelesseje [2] Lesline Bess (Court Appointed Representative of the Estate of Othneil R Sylvester deceased) Respondents

• Jurisdiction: St Vincent and the Grenadines
• Judge: The Hon. Mde. Louise Esther Blenman,The Hon. Mr. Davidson Kelvin Baptiste,The Hon. Mr. Mario Michel
• Judgment Date: 18 April 2016
• Judgment citation (vLex): [2016] ECSC J0418-3
• Date: 18 April 2016
• Docket Number: SVGHCVAP2014/0017
• Year: 2016
• Court: Court of Appeal (Saint Vincent)

[2016] ECSC J0418-3

EASTERN CARIBBEAN SUPREME COURT

IN THE COURT OF APPEAL

Before:

The Hon. Mr. Davidson Kelvin Baptiste Justice of Appeal

The Hon. Mde. Louise Esther Blenman Justice of Appeal

The Hon. Mr. Mario Michel Justice of Appeal

SVGHCVAP2014/0017

Between:

[1] Aquaduct Limited

[2] Bertille Da Silva

Appellants

and

[1] Faelesseje

[2] Lesline Bess (Court Appointed Representative of the Estate of Othneil R. Sylvester deceased)

Respondents

Appearances:

Frederick A. Gilkes and Yuri J.R. Saunders for the appellants

Stephen Williams holding for Richard Williams for the first respondent

Graham Bollers as amicus curiae for court-appointed receiver

Civil Appeal — Interlocutory Appeal — Preliminary Issues — Enforcement Proceedings — Provisional Charging Order — Objection to Grant of Final Charging Order — Part 48 of Civil Procedure Rules 2000 — Summary Proceedings — Whether there should be a separate trial of preliminary issues — Whether learned judge erred in fact and law by ruling that in giving directions for the filing of affidavit evidence and disclosure of documents the preliminary objection taken by appellants was implicitly ruled on — Whether learned judge conflated procedure appropriate to summary hearing of dispute with procedure for fair disposal of said dispute where dispute could not be fairly resolved summarily

This appeal arises out of enforcement proceedings under Part 48 of the Civil Procedure Rules 2000 ("CPR 2000") in relation to a judgment debt of EC $5,212,500.00 obtained by Faelesseje against the estate of the late O. R. Sylvester ("the Estate"). Faelesseje had applied ex-parte for a provisional charging order pursuant to Part 48 to charge a 50% share or interest in Aquaduct Limited ("Aquaduct") for the purpose of fulfilling a debt owed by the Estate to Faelesseje.

On 31 ^st January 2014, the appellants filed a formal objection to the granting of a final charging order on the grounds that: O.R. Sylvester only had 1 share in Aquaduct (that is, 1/7 ^th of the issued shares); the Estate does not now, nor did O.R. Sylvester ever own a 50% share or interest in Aquaduct; if the provisional order were made absolute, it would essentially fix on shares to which the Estate is not entitled; the judgment creditor (first-named respondent) is only peripherally concerned with the issues — that is, a dispute between the appellants and the second-named respondent, judicial resolution of which would require a claim form, pleadings, evidence and cross-examination. The core of the appellants' objections therefore is that a new claim form is required to properly commence proceedings in order to determine the extent of O.R. Sylvester's true shareholding in Aquaduct.

At the first hearing of the charging proceedings, counsel for the appellants implored the court to consider their submissions and objections. The court proceeded to give directions for the filing of further affidavit evidence and for the disclosure of documents. The appellants filed affidavits seeking to dispute the proposition that O.R Sylvester had a 50% stake in Aquaduct. When hearing of the matter began before the judge, the appellants' counsel took a preliminary point of law that the court had no jurisdiction to resolve Sylvester's claim to a 50% beneficial ownership in Aquaduct by what appeared to be summary proceedings within the Part 48 charging proceedings. The appellants' counsel submitted that the court's jurisdiction under Part 48 in such a case is limited to making a determination as to whether the provisional charging order ought to be made absolute. Although rule 48.8(4) contemplates that where a dispute as to ownership arises which can be "fairly resolved summarily" the court may enquire into the beneficial ownership of assets sought to be charged, it was impossible to resolve the present matter summarily as it concerned an extremely contentious dispute between Bertille Da Silva and the Estate. The appellants contend that in order to ensure fairness of the proceedings, the court was obliged to give directions for trial of that dispute, with all the normal incidents of trial under the CPR 2000.

The respondents submitted that the matter is not complex and that the judge's approach was correct having regard to the overriding objective of the CPR when she interpreted Part

48. They argued that the issues to be determined were well-known from the provisional charging order, the objections filed and the affidavits in support of the objections. The learned judge ordered a trial of the sole issue "what is the shareholding or beneficial interest of the judgment creditor in the first appellant". The respondents further posited that the learned judge having read the appellants' objections and determining that there was an issue which could not be tried summarily gave directions for affidavits to be filed and for disclosure to be made by both sides in order to determine the issue in the most efficient manner.

The learned judge ruled that she had given directions for the filing of further affidavit evidence after the appellants' objections and this implicitly amounted to a dismissal of the said objection. The preliminary point of law was in effect the same objection. The court had jurisdiction to try a substantial issue of fact that had arisen between the parties in the course of Part 48 proceedings and had given proper directions for the trial of the issues that had arisen.

In appealing the decision of the learned judge, the appellants advanced five grounds of appeal. In Ground A, the appellants complained that the learned judge erred in fact and law by finding that by giving directions for the filing of affidavit evidence and for disclosure of documents, she had implicitly ruled on the preliminary objection that the appellants had taken. The appellants contended that the judge made no ruling on the objection and the directions she gave cannot amount to an implicit ruling on the preliminary objection. The appellants further argued that they ought not to be prejudiced by their failure to understand that by giving directions for the filing of further evidence, the judge's intention was to dismiss their preliminary objection. In Grounds B, C, and D, the appellants' essential complaint is that the learned judge conflated the procedure that was appropriate to the summary hearing of a dispute, arising in the course of the charging proceedings, as to the ownership of the asset sought to be charged, with the procedure that she ought to have directed for the fair disposal of that dispute once she recognised that the dispute could not be fairly resolved summarily. Grounds E and F relate to the prejudice caused by the manner in which the Court has allowed the matter to proceed.

Held: allowing the appeal and making the orders set out in paragraph 37 of the judgment below and ordering costs to the appellants in the court below and on the appeal, that:

• 1. The court and the parties should give careful consideration to the issues to be determined when making an order for a split trial. Where a claim is highly fact sensitive, it is important to establish the factual premise for the issue of law on which the judge was invited to rule. Preliminary issues should not be set in motion in a casual and unstructured way. There is a need for absolute clarity when a court orders the trial of a preliminary issue. The right approach to preliminary issues should be (inter alia) that the questions should usually be questions of law and should be decided on the basis of a schedule of agreed or assumed facts. The preliminary point of law taken by the appellants was that the court had no jurisdiction to resolve Sylvester's claim to a 50% beneficial ownership in Aquaduct by what appeared to be summary proceedings within the Part 48 charging proceedings. In the circumstances, the learned judge ought to have addressed that point directly and was plainly wrong by ruling that the directions she had given for the filing of further affidavit evidence and cross-examination after the appellants' objections implicitly amounted to a dismissal of the said objection.

  Mcloughlin v Jones [2002] QB 1312 applied; Larkfleet v Allison Homes Eastern Limited [2016] EWHC 195 applied; Lady Arden in Royal & Sun Alliance Insurance plc frv T & N Limited [2002] EWCA Civ 1964 applied; Tilling v Whiteman [1979] 1 All ER 737 applied; SCA Packaging Ltd v Boyle [2009] UKHL 37 applied; Ashmore v Corporation of Lloyd's [1992] 2 All ER 486 applied.

• 2. CPR 48.8(4) entrusts the judge with a discretion to give directions for the resolution of any objection that cannot be resolved summarily. The directions adverted to in this rule would place a court in a position to resolve, fairly and properly, the substantial issues of fact and law that had arisen between the Estate and the Appellants as to the Estate's shareholding in Aquaduct. By giving directions, the learned judge prima facie accepted that the dispute as to the ownership of the shares could not be resolved summarily. Having determined that a summary resolution of those issues was not possible, the learned judge could not properly realise the objective of a fair resolution of that issue by the mere filing of further affidavit evidence. Given the importance of the issues, their resolution necessitated the rigours of a trial and most importantly, pleadings that would facilitate a fair trial. The learned trial judge was therefore unfair to the appellants and plainly wrong in her approach of adopting a procedure akin to that of a summary resolution of the dispute.

  In Re U (children) [2015] EWCA Civ 334 applied; Broughton v Kop Football (Cayman) Ltd [2012] EWCA Civ 1743 applied; Prince Abdulaziz v Apex Global Management Ltd & Anor (Rev 2) [2014] UKSC 64 applied; Royal & Sun Alliance Insurance plc v T & N Limited [2002] EWCA Civ 1964 applied; In The Matter of TG (A Child) [2013] EWCA Civ 5 applied; Re...