Millhawke Holdings (Bequia) Ltd Stowe Construction (Bequia) Ltd Henry John Marriott (also known as Harry Marriott) Hon. Dinah Lilian Marriott Claimants v Stanley Jorg Dormieden Timothy Gabriel Carib Construction Carib International Leomore Macdonald Stanley's Food and Beverages Ltd Defendants [ECSC]

JurisdictionSt Vincent and the Grenadines
CourtHigh Court (Saint Vincent)
JudgeTHOM, J
Judgment Date19 April 2011
Judgment citation (vLex)[2011] ECSC J0419-1
Docket NumberHIGH COURT CIVIL CLAIM N0. 301 OF 2010
Date19 April 2011
[2011] ECSC J0419-1

THE EASTERN CARIBBEAN SUPREME COURT

IN THE HIGH COURT OF JUSTICE

HIGH COURT CIVIL CLAIM N0. 301 OF 2010

Between:
Millhawke Holdings (Bequia) Ltd
Stowe Construction (Bequia) Ltd
Henry John Marriott (also known as Harry Marriott)
Hon. Dinah Lilian Marriott
Claimants
and
Stanley Jorg Dormieden
Timothy Gabriel
Carib Construction
Carib International
Leomore Macdonald
Stanley's Food and Beverages Ltd
Defendants
THOM, J
1

On the 1st day of September, 2010 on an application without notice filed by the First, Second and Third Claimants the Court granted the following interim reliefs:

  • (i) A search order in relation to the premises of Stanley Jorg Dormieden situate at Lower Bay Bequia, the premises of Timothy Gabriel situate at Spring Bequia, and the premises of Leomore McDonald situate at Port Elizabeth, Bequia.

  • (ii) An injunction restraining the Defendants from entering onto the properties owned and under the control of the Applicants and situate at Mount Pleasant Bequia and from destroying, tampering with, concealing or parting with possession, power, custody or control of the listed items.

  • (iii) A freezing order in relation to the bank accounts of the First, Second, Third and Fourth Defendants. The First and Second Defendants were permitted to withdraw sums not exceeding EC$1,000.00 per week towards their ordinary and proper living expenses. The Third and Fourth Defendants were permitted to withdraw sums not exceeding EC$1,500.00 per week towards their ordinary business expenses.

2

By consent the Order was amended on October 1, 2010 to permit the First Defendant to withdraw sums not exceeding EC$9,000 per month from his accounts at RBTT Bank, the Second Defendant was permitted to withdraw sums not exceeding EC$20,000 per month and the Third and Fourth named Defendants were permitted to withdraw sums not exceeding EC$1,500 per week towards their ordinary business expenses. On December 15 the Order was further amended to permit the First Defendant to withdraw sums not exceeding EC$20,000 per month and the Second Respondent EC$40,000 per month.

3

On the 17th September 2010 the Second Defendant filed an application for a stay of all proceedings and the Applicants filed an application for a continuation of the Order.

BACKGROUND
4

The Application for interim relief was made by the First, Second and Third Claimants and was made against the First thru to the Fifth Defendants. The Third Claimant and his wife the Fourth Claimant and the First Defendant negotiated and agreed the terms and conditions on which to purchase property in Bequia and develop and sell such property ("The Project"). The agreed terms are outlined in a Joint Venture Agreement (JVA) which was executed by the Third and Fourth Claimants and the Sixth Defendant through the First Defendant shareholder and director of the Sixth Defendant. A dispute has arisen in relation to the Project and as a result the Applicants sought interim reliefs and filed a statement of claim in which they seek several reliefs against the Defendants.

APPLICATION FOR A STAY
A. Preliminary submission
5

At the commencement of the hearing of the application Ms. N. Sylvester made a preliminary submission that the Defendants should not be permitted to proceed with the application since they had not filed an acknowledgment of service pursuant to Part 9.7 of CPR 2000.

6

Learned Counsel Mr. S. John acknowledged that an acknowledgment of service was not filed and submitted that the Application was made pursuant to the inherent jurisdiction of the Court and Part 26 of CPR. Learned Counsel referred the Court to the decision of the Privy Council inTexan Management et al v Pacific Electric Wire and Cable Company Ltd. 2009 UK PC 46.

7

Learned Counsel for the Claimants in reply submitted that where the rule makes special provision as to how a party should proceed then the party must proceed in accordance with the rules. The procedures referred to in sections 76-77 of theTexan Management case do not apply to this case.

8

The provisions of Part 9.7 and Part 26.2(q) were reviewed by the Privy Council in theTexan ManagementCase. The Court summarised the effect of the provisions in paragraph 77 of the judgment in the following manner:

"77. To summarise, the overall position is this: (1) if at the time the proceedings are first served, there are circumstances which would justify a stay, the application should be made promptly under EC CPR r. 9.7, English CPR part 11; (2) any failure to comply strictly with time-limits may be dealt with by an extension of the time-limits, and any formal defect in the application may be cured by the Court; (3) if circumstances arise subsequently which would justify an application for a stay, the application would be made under the inherent jurisdiction of EC CPR 26.2(q); English CPRr.3.1(2)(f).

9

The application does not state the specific rule under which it is made. It is not disputed that no acknowledgement of service was filed pursuant to Part 9.7(2). The failure to file an acknowledgment of service is a formal defect which could be cured by a Court as stated in paragraph 77(2) of theTexan ManagementCase. Part 26.9 empowers the Court to make an order to put matters right where no consequence of failure to comply with a rule has been specified by a rule, practice direction or court order. No consequences are specified for a failure to comply with Part 9.7(2), therefore I find that it is appropriate in these circumstances to make an order to put matters right and I so do.

B. Substantive Submissions
10

The application for stay of all proceedings was filed by the Second Defendant and is supported by the First and Sixth Defendants. The ground on which the Application is based is that the dispute between the parties, the subject matter of these proceedings ought to be determined by an expert in accordance with the provisions of clauses 6. 5 and 19 of the JVA, and the determination of the expert is to be conclusive and binding except in a case of mistake of law.

11

Learned Counsel Mr. S. John submitted that the allegations of the Claimants all relate to breach by the First Defendant in the performance of the duties of the Sixth Defendant under the JVA. Learned Counsel referred the Court to the Claimants statement of case and submitted that the Claimants in their pleaded case alleged breach of contract, breach of fiduciary duties, conversion, deceit and misrepresentation. The first three fall withinclause 6.5 of the JVA and the other two are baseless claims included simply to make it appear that clause 6.5 is not applicable.

12

The Claimants were required to submit the dispute to be determined by an expert in keeping with the well establish principle that where an agreement makes specific provisions that a dispute should be determined exclusively by an expert, the Court has no jurisdiction to make a determination on the said dispute. Learned Counsel referred the Court to the case ofVictor International Corporation et al v Spanish Town Development Company and Others and submitted that the principle applies not only to arbitration but also to mediation or resolution via an expert.

13

It was submitted further on behalf of the Second Defendant that even though the Second Defendant is not a party to the JVA the allegations against the Second Defendant are that he colluded with the First Defendant, the claims against him are inseparable from the claims against the First Defendant.

SUBMISSIONS ON BEHALF OF THE CLAIMANTS
14

Learned Counsel for the Claimants submitted that the Application for stay was not made by the First and Sixth Defendants but by the Second Defendant and supported by the First and Sixth Defendants. The Second Defendant is not a party to the JVA and therefore cannot rely on clause 6.5 of the JVA to have the proceedings stayed. The JVA is only applicable as it relates to the Third and Fourth Claimants and the Sixth Defendant, The First and Second Claimant and the First, Second, Third, Fourth and Fifth Defendants are not party to the JVA and cannot be compelled to arbitrate in accordance with the JVA. Learned Counsel referred the Court to the case ofOxford Shipping Company Ltd v Nippon Yusen Kaisha [The Eastern Shear] No. 2 [1984] 3AER.

15

Learned Counsel further submitted that clause 6.5 could only be relied on if the dispute arises over the duties of the Project Manager. Among the reliefs sought by the Claimants in their Claim Form is relief for damages, for deceit, conversion, breach of fiduciary duty by the First Defendant, damages for loss of use of the Second Claimant's labour force andplant and machinery. These issues are not arbitrable in the context of the JVA. Learned Counsel referred the Court to the case of Ocean Conversion Ltd v The Attorney General of the Virgin Islands HCVAP 2007/030 and Russell on Arbitration 22nd ed. pp. 26-29. Further under the JVA clause 19.1(2) states that the person appointed as an expert would not be an arbitrator. The expert would not be an appropriate forum for the settling of the disputes in this case see the Spiliadacase. The allegations against the Project Manager are instances where the Project Manager was acting outside of his duties as outlined in clause 6, thus clauses 6. 5 and 19 are not relevant. Learned Counsel referred the Court to the cases of Felix DaSilva v A-G of Saint Vincent and the Grenadines No. 356 of 1989; Public Service Commission v Davisand Others [1984] 33 WIR p. 113; Public Service Commission and A-G of the Commonwealth of Dominica v Dornell Shillinqford Civil Appeal No. 10 of 1988.

LAW AND COURT'S ANALYSIS
17

The issue to be determined is whether the Court should exercise its jurisdiction to determine the questions raised in the Claimant's statement of case or these questions should be determined by an expert pursuant to clause 6.5 of the JVA.

18

Clause 6.5...

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