Bacchus and Bacchus-browne of Prospect; Lewis and Legair v Rbtt Bank Caribbean Ltd
| Jurisdiction | St Vincent and the Grenadines |
| Judge | Actie, M. |
| Judgment Date | 11 December 2014 |
| Neutral Citation | VC 2014 HC 49 |
| Docket Number | SVGHCV 254, 280 & 330 of 2011 |
| Court | High Court (Saint Vincent) |
| Date | 11 December 2014 |
High Court
Actie, M. (Ag.)
SVGHCV 254, 280 & 330 of 2011
Ms. Nicole Sylvester of counsel for the claimants Bacchus and Lewis
Ms. Samuel Commisiong QC of Counsel for claimant Isaac Legair
Ms. Paula David of counsel for defendant in claim 254 & 280 of 2011
Mr. Stanley John QC with Akeem John for defendants in claim 330 of 2011
Insurance - Preliminary issue — Trustee provided inaccurate information about the nature and value of the trust assets — Whether the claimants have locus standi to institute the claims before the court or whether it is the supervisor of insurance who is the beneficiary under the trust created by the Act — Supervisor of Insurance and not the claimants who has locus standi to pursue an action against the defendant a trustee where there is an alleged breach of the provisions of the Act.
Actie, M. [AG.]: This is a matter to determine a preliminary issue. The parties by order of the master have been directed to file submissions to determine whether the claimants have locus standi to institute the claims before this court or whether it is the Supervisor of Insurance who is the beneficiary under the trust created under the provisions of the Insurance Act of Saint Vincent and The Grenadines [CAP. 306 of Laws of Saint Vincent & the Grenadines].
It is instructive to set out the background facts giving rise to this determination of the preliminary issue. The claimants in all three claims are holders of investments portfolios/policies with the besieged British American Insurance Company (BAICO). By letter dated 16th April 2009, RBTT Bank Caribbean Ltd, as custodian of the trust assets in relation to BAICO informed the Supervisor of Insurance that the trust fund contained assets to the amount of $140,547,665.57 in keeping with the provisions of Section 32(2) of the Insurance Act of Saint Vincent and the Grenadines. BAICO subsequently went into judicial management and a judicial manager was appointed. The judicial manager in a report dated 18th December 2009, stated that the trust fund was in deficit and in actuality contained only $53,000,000.00 contrary to the defendant's earlier report.
The claimants contend that the defendant, RBTT, as a trustee, under the Insurance Act had the responsibility to provide accurate information about the nature and value of the trust assets. The bank as trustee of the insurance fund having failed to maintain the statutory deposit as obligated by the Insurance Act breached its fiduciary duties and/or trust obligations pursuant to Section 31(2) of the Insurance Act. The claimants allege that they are entitled in equity and/or by virtue of Section 32(3) of the Act to an interest in the Fund, which BAICO as a licensed insurer was required to establish in respect of long term insurance business. The claimants allege that they were all deprived of the benefits of their investment portfolios at the maturity date of their investments as a result of the breach of trust by the defendant bank.
The defendant, RBTT Bank Ltd, filed an application to strike out the claims alleging that the parties had no Locus standi to pursue the claims. On 24th February 2014, when the matter came on for determination, the master directed the parties to file and exchange submissions to address a preliminary point to determine “whether on the proper construction of the Insurance Act, the claimants have any locus standi to institute the claims before the court or whether it is the Supervisor of Insurance who is the beneficiary under the trust required to be created by an insurer whom the Act regulates?”
The claims are not consolidated but they all raise the similar preliminary point and for convenience I will deal with all three matters in this one judgment
SUBMISSIONS BY MS. NICOLE SYLVESTER ON BEHALF OF JEMIMA BACHUS & KAY BACCHUS-BROWEN v. RBTT IN CLAIM 254/2011 AND DR. LINTON LEWIS v. RBTT IN CLAIM 280/2011
Ms. Nicole Sylvester submits that in an ordinary action whether by way of adeclaration, injunction or damages, the claimant must have some private legalright or legal interest recognised by law which has been violated by the defendant. Section 29(1) of the Insurance Act makes provisions for the statutory trust fund to be established and the assets of the fund to be placed in trust within 4 months of an insurer's year end (s. 29 (2). The placed assets are deemed trust assets and any bank or financial institution holding these assets are deemed to be a trustee pursuant to Section 31(2). The bank as trustee is responsible (like all ordinary trustees) for taking title to the trust assets and to keep the same in a segregated pool, separate and distinct from its own assets.
Counsel submits that the trust assets are held to the order of or on behalf of the Supervisor of Insurance pursuant to Section 31(2) of the Act. The assets were to be beyond the reach of the insurer and as such the trustee shall not deal with the trust assets without the prior approval of the Supervisor pursuant to Section 32(1) of the Act. When a trustee bank/financial institution deal with the assets without the prior approval of the Supervisor, such an bank/institution shall be liable to policy holders who are the beneficiaries of the trust. The policy holders as beneficiaries therefore have locus standi to proceed against the bank trustee.
Counsel referred the court to the House of Lords decision in Butler v. Fire Co. Ltd [ [1912] AC 149, 165] where it was stated:
“there is no reasonable ground for maintaining that a proceeding by way of penalty is the only remedy allowed by statute We are to consider the scope and purpose of the statute and in particular for whose benefit it is intended. Now the object of the present statute is plain. It was intended to compel mine owners to make due provision for the safety of the men working in their mines, and the persons for whose benefit all these rules are to be enforced are the persons exposed to danger. But when a duty of this kind is imposed for the benefit of particular persons there arises at common law a correlative right in those persons who may be injured by its contravention.”
Counsel contends that the extent to which the claimants claim to have a cause of action for breach of a statutory duty depends on whether they belong to a class of persons that the legislation intends to protect. In support of that proposition counsel relies on the dicta in the House of Lords case of Ex parte Hague [Regina v. Deputy Governor or Parkhurst Prison and others exparte Hague [1992] 1 AC 58 page 159] and the decision of Groves v. Wimborne [1898] 2 Q.B 402 where Vaugh Williams LJ stated:
“….. It cannot be doubted that, where a statute provides for the performance by certain persons of a particular duty, and someone belonging to a class of persons for whose benefit and protection the statute imposes the duty is injured by failure to perform it, prima facie, and, if there be nothing to the contrary, an action by the person so injured will lie against the person who has so failed to perform the duty.”
This proposition counsel asserts was reinforced by the House of Lords decision in London Passenger Transport Board v. Upson [1949] AC 155 at P. 168 where it was stated:
“… a claim for damages for breach of statutory duty intended to protect a person in the position of the particular plaintiff is a specific common law right which is not to be confused in essence with a claim for negligence. The statutory right has its origin in the statute, but the particular remedy of an action for damages is given by the common law in order to make effective, for the benefit of the injured plaintiff, his right to the performance by the defendant of the defendant's statutory duty.”
Counsel states that the clear import of Section 32 (2) and (3) of the Insurance Act is to deem RBTT, a trustee of the assets received from the BAICO and the policy holders fall under a class of persons that the legislation seeks to protect. Counsel further submits that the trust was created to safeguard the assets of the policy holders. The defendant bank having dealt with the assets held in trust without the approval of the Supervisor of Insurance contravened the Act resulting in the loss suffered by the claimants. Counsel further referred the court to the House of Lords decision in Calveley et al v. Chief Constable of the Merseyside Police [1989] AC 1228 where Lord Bridge stated;
“… the duty is imposed for the benefit of the police officer subject to investigation is plain. It seems to me equally plain that the legislature cannot have contemplated that the object of the duty was to protect the officer from any injury of a kind attracting compensation and cannot, therefore have been intended to give him a right to damages for breach of the duty.”
Counsel submits that even though the statute did not expressly state that the beneficiary can bring an action against the trustee, the only reasonable interpretation is that the liability under the trust can be enforced by an appropriate policy holder against the trustee. Counsel further submits that it must be established that Parliament intended that an appropriate policy holder can bring an action against the trustee for any harm suffered. Counsel states that section 32(3) of the Act clearly demonstrates the intention of parliament as the assets are held to the order of or on behalf of the Supervisor of Insurance for the claimants as beneficiaries under the trust. Counsel states that the Supervisor has no equitable or beneficial interest in the trust assets as he could not enjoy the benefits of the trust. When the trustee bank deals with the assets without the prior approval of the supervisor it becomes liable to policy holders as beneficiaries of the trust...
To continue reading
Request your trial