Digital Wings Ltd v Lekeicha Caesar-Toney and Dilana Roussev
| Jurisdiction | St Vincent and the Grenadines |
| Judge | Henry, J. |
| Judgment Date | 11 July 2018 |
| Neutral Citation | VC 2018 HC 44 |
| Court | High Court (Saint Vincent and the Grenadines) |
| Docket Number | SVGHCM2016/0214 |
| Date | 11 July 2018 |
THE EASTERN CARIBBEAN SUPREME COURT
IN THE HIGH COURT OF JUSTICE
Henry, J.
SVGHCM2016/0214
In The Matter of sections 247 and 249 of the Companies Act Cap. 143
and
In The Matter of Division B of Part III of the Companies Act Cap. 143
and
In The Matter of Digital Wings Limited
and
Mr. Stephen Smith Q.C. with him Mr. Mikhail Charles for the claimant.
Mr. Grahame Bollers for the first defendant.
Mr. Alan Gourgey Q.C. with him Ms. Ashelle Morgan for the second defendant.
Civil practice and procedure - Pleadings — Application for striking out of claim — Stay of proceedings — Extension of time to file defence.
Digital Wings Ltd. (‘Digital Wings’) is a corporate entity. Mrs. Diliana Rousseva claims to have proprietary interests in it. Digital Wings was incorporated in the Virgin Islands (‘BVI’) and later registered 1 as an external company in Saint Vincent and the Grenadines, pursuant to the Companies Act 2. Prior to that, it was registered as a limited liability company in the British Overseas Territory of the Virgin Islands (‘TVI’) with a single named shareholder — Mrs. Diliana Rousseva.
Digital Wings alleged that since its inception a number of changes have been made in its corporate structure relative to transfer of shares and the appointment of directors. Ms. Joycelyn Bennett provided affidavit testimony 3 of those alleged changes. In it, Digital Wings claimed that Mrs. Rousseva has never been one of its directors and ceased being a shareholder on May 23 rd 2014, when she allegedly transferred all of her shares to GBS Trustees Ltd. (‘GBS’). It claimed further that Ms. Bennett and James Stuart Bennett became its directors in December 2015. It alleged that nonetheless in August 2016, the Registrar of Companies in Saint Vincent and the Grenadines (‘the Registrar’) accepted and stamped as filed, annual returns for the years ending December 31, 2013, 2014 and 2015 that were signed by Mrs. Rousseva as director and sole shareholder.
Digital Wings contended that the documents are fraudulent because Mrs. Rousseva lacks the capacity to represent it as director or shareholder. By Fixed Date Claim Form filed on 25 th November 2016, it initiated action against the Registrar for among other things, an order directing her to cancel the annual returns filed by Mrs. Rousseva. The Registrar has resisted the claim.
Mrs. Rousseva was added as a defendant by Amended Fixed Date Claim filed on 7 th July 2017. She filed this application in the instant claim (‘the Digital Wings' claim’) which was set down for
hearing on April 25 th 2018. In it, she sought an order:-
1. to stay the proceedings;
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2. striking out the claim against her;
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3. granting her an extension of time to file her defence; and
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4. costs.
In a related but separate proceedings, (‘the Martin Trott Motion’) Mr. Martin Trott filed an ex parte motion on 20 th December 2017 in which he sought an order to recognize as conclusive that, Digital Wings is insolvent and that he is its foreign representative within the meaning of Part XI of the Bankruptcy and Insolvency Act, Cap. 136. That matter has proceeded in accordance with the rules and by order dated 5 th March 2018 the substantive hearing was adjourned to a date to be fixed by the Registrar after the hearing of the Digital Wings claim.
When the Digital Wings application was called on 25 th April 2018, learned Queens' Counsel Mr. Smith and his junior Mr. Mikhail Charles entered an appearance for Mr. Trott. The court's direction was directed to the Martin Trott Motion. It was not filed in the Digital Wings matter and did not appear in that case file. However, it was included among numerous documents filed 2 days before the hearing in a large bundle in the Digital Wings claim. It was one of 33 extensive documents submitted by the parties in that bundle. Between 12 th April 2018 and the hearing date, each party had also filed substantive bundles including submissions and authorities. It was impossible to read all of them documents within that time.
The Court was invited to consider the Motion along with the Digital Wings application. It was not immediately apparent that the second of the two involved a separate case. No counsel brought this to the Court's attention. Although I was unable to locate it in the Digital Wings case file, it was in the hearing bundle. Assuming (incorrectly) that it was part of the Digital Wings case, I indicated that both would be heard together.
In her written submissions, Mrs. Rousseva averred that on 14 th February 2018 the Court had made an order in the Martin Trott Motion adjourning the hearing to 25 th April 2018 with the intention that it would be heard along with the Digital Wings claim. This is not so.
In any event, about two days after the hearing on 25 th April 2018, while reviewing the file in the Digital Wings claim and on seeking clarification regarding how the matters became intertwined, I realized what had happened. I invited the parties to attend court on 14 th May 2018 to provide submissions regarding how the court should deal with this conundrum.
Learned Queen's Counsel were both absent as were learned counsel Mr. Grahame Bollers and Mr. Mikhail Charles. Present were Ms. Moureeze Franklyn holding papers for Mr. Mikhail Charles counsel for the claimant and Ms. Ashelle Morgan counsel for the defendant. They made no submissions. It was ordered that the parties should file submissions on or before 28 th May 2018 addressing this matter. They (Mr. Trott and Mrs. Rousseva) filed joint submissions on 28 th May 2018.
They submitted that following the hearing of the Martin Motion on 14 th February 2018 they submitted a draft consent order that the recognition application and the present application be heard together on 25 th April 2018. They acknowledged that they were not provided with a sealed copy of the proposed consent order. They argued that its submission led to the hearing of the Recognition application being vacated from 12 th March 2018 and was confirmed by two telephone calls on 9 th and 12 th March 2018. I am not aware of those events.
They accepted that they received no confirmation from the Court Registry or the Court Administrator that both matters would be heard together. They proposed that the Court should proceed as if the Recognition Application was before it on 25h April 2018 and that it is in a position to give judgment on that Application and the Rousseva Application. They indicated that they do not wish to have a hearing on either application.
They contended that the Court had the power to hear the Recognition Application on April 25 th 2018 where the parties consented to it. They submitted that pursuant to CPR 11.14 (d) the Court may deal with an application without a hearing if the parties agree. They submitted further that it may proceed to hear a matter for which there is no listed hearing, if the parties agree. They argued that the parties have so consented in the instant case. They requested that the Court proceed to do so.
They submitted further that the Court may also hear matters relating to the same subject matter simultaneously regardless of whether they are formally consolidated. They argued that the Court would be giving effect to the overriding objective if it took that course in the case at bar. In this regard, they contended that the Court would be saving expense, dealing with the applications expeditiously and ensuring that an appropriate share of its resources and not more are expended on them. They indicated that requiring them to attend again and rehearse the same arguments at great expense to them would be contrary to the overriding objective. Although the foregoing outlines a compelling argument, I adopt a different course for the reasons provided later.
They submitted that by inviting them to open the Recognition Application the Court was directing that the hearing in it be brought forward to that date. They contended that the Court should put matters right pursuant to its powers under CPR 26.9 (3) by recording an adjournment of the Recognition Application by consent. This approach does not commend itself to me.
No order has been made consolidating the matters and no application has been made to such effect. Mr. Trott has filed no ancillary claim or made an application to be added as a party to the present claim, as he is entitled to do. In the circumstances, I am satisfied that only the Digital Wings application was before me and that it is appropriate to make an order at this stage regularizing the referenced oversight and irregularity.
It is accordingly ordered:
I apologize to the parties for any inconvenience this might cause.
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1. The direction made on 25 th April, 2018 that both applications be heard jointly, is set aside.
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2. The order dated 5 th March 2018 adjourning the substantive hearing of the Martin Trott Motion to a date to be fixed by the Registrar, is affirmed.
The issues are whether the Court should:
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1. stay the present proceedings;
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2. strike out the claim against Mrs. Diliana Rousseva; or
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3. grant Mrs. Diliana Rousseva an extension of time to file her defence and costs.
Mrs. Rousseva provided no affidavit testimony. Her husband Spas Roussev did on her behalf. He attested that he notes Ms. Bennett's assertions that a share transfer document was executed which purportedly transferred all Digital Wings' shares to GBS, a subsidiary of Leman. He remarked that he took note of Ms. Bennett's further claims that Mr. O'Connor as sole director appointed Charles John Bennett as sole director and that he was subsequently...
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