Legal action taken by NGC …”SIS LOSES IN PRIVY COUNCIL”

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Super Industrial Services Limited (SIS) and its subsidiary company, Rain Forest Resorts Limited, have lost their application for leave before the Judicial Committee of the Privy Council in London.

Both companies were seeking leave to appeal against a decision of the Trinidad and Tobago Court of Appeal in a matter involving the National gas Company.

The application came before Lords Mance, Hughes, and Briggs who  refused permission to appeal because the application does not raise an arguable point of law of general public importance.

THE FACTS

 

This action began on December 23, 2015 by way of an emergency application for injunctions made by the NGC, in proceedings brought against Rain Forest Resorts and SIS.

The injunctions, including a freezing injunction against SIS, were granted by Justice Joan Charles prior to the filing of the claim form and statement of case by a judge who was not the docketed judge and were made without notice to the companies.

The freezing injunction granted to NGC prevented SIS from disposing, dealing with, or diminishing the value of any of its assets within the jurisdiction up to the value of $180,000,000.00. The injunction against Rain Forest Resorts prevented it from dealing with or disposing with property of SIS the subject of mortgages and a debenture in its favour.

NGC took out proceedings over the failed Beetham Waste Water Project.

At the same time as the injunctions were granted directions were given for the filing of the claim form and the statement of case. By its claim form, filed on 24th December 2016, the NGC sought against both appellants: declarations that some five mortgages and a debenture made between SIS and Rain Forest over property owned by SIS, were made by SIS to hinder and defraud NGC; and orders that the mortgages and the debenture be set aside and directing that the said mortgages and debenture and all statements of charge filed in respect of them be expunged from the relevant records by the Registrar General and the Registrar of Companies.

The claim form also sought the injunctions obtained the day before, costs and further and/or other relief. By 6th January 2016, the action had been assigned to the docketed judge. On 6th ,7th and 8th of January 2016, the judge heard two applications: an application by NGC to continue the injunctions and an application by SIS to discharge the injunction granted against it.

During the course of their submissions before the judge NGC indicated that the sole purpose of the action was to prevent the assets of SIS from being dissipated pending the commencement and completion of arbitration proceedings that were to be instituted against SIS pursuant to the provisions of a contract dated 10th March 2014 between it and SIS.

NGC sought to have the freezing injunction continue until the hearing and determination of the arbitration.

With respect to the mortgages and the debenture, during the course of the hearing on the applications, SIS asserted that no funds had passed pursuant to these transactions, that the mortgages and the debenture had been prepared in escrow and that Rain Forest had indicated its willingness to release the mortgages and the debenture.

On 8th of January, at the close of the submissions, the judge made the following order:

“Upon reading the Claimant’s Notice of Application dated the 29th December 2015, the Defendants’ Notice of Application dated the 29th December 2015 together with the affidavit of Romila Mathura, the exhibits and the affidavits of Winston Siriram, both affidavits sworn and filed on 29th December, and upon hearing attorney at law for the Claimant and the attorneys at law for the Defendants it is hereby ordered that the injunctions to continue until the determination of both applications and the matter is adjourned to the 29th February 2016.”

At this stage only the claim form had been filed. In accordance with the directions given by the emergency judge on 25th January 2016, NGC filed its statement of case and, in accordance with part 10.3(1) of the Civil Proceedings Rules (CPR), both companies filed their defences on 22nd February.

NGC’s defence was served on the said date while Rain Forest’s defence was served on the following day. The statement of case and the defences confirmed the positions taken during the course of the hearing of the applications with respect to the purpose of the claim and on the mortgages and the debenture by NGC and SIS respectively. As well Rain Forest, in its defence, confirmed its willingness to release the mortgages and the debenture.

On 24th February, without requiring the attendance of the parties, by an email from the judge’s judicial support officer (JSO), the judge communicated the rescheduling of the hearing of 29th February to the parties and fixed the matter for 8th March 2016.

During the period 26th February 2016 to 25th May 2016, NGC and SIS were engaged in settlement discussions initiated by SIS. Pursuant to a request by NGC, on behalf of all the parties, to adjourn the hearing for at least one month to facilitate these discussions the judge, again without a hearing, adjourned the hearing fixed for 8th March to 18th May 2016.

This adjournment was communicated to the parties by an email from the JSO.

The email advised the parties that the hearing in the matter scheduled for 8th March 2016 was vacated; the matter was adjourned to 18th May and that the injunction in the matter was to continue until the adjourned date. In her reasons, the subject matter of this appeal, the judge indicated that her intention was to give her decision on the applications on 8th March and also give directions for the progress of the matter.

By a letter dated 17th May 2016 the parties, again by communication from NGC’s attorneys, requested a further adjournment of a few days to facilitate continuing settlement discussions.

After some further communication between the JSO and the parties as to proposed dates, by email dated 19th May from the JSO, the parties were advised that the matter was rescheduled to 21st June 2016. 17. By letters written by attorneys for SIS, all dated 6th June 2016 and addressed to the Registrar, NGC’s attorneys, and the JSO respectively, SIS referred to part 27.3(4) of the CPR and contended that in accordance with that rule the action had been automatically struck out on 22nd March 2016.

They also called upon the Registrar to issue a certificate confirming the automatic dismissal of the action. As well they requested that the judge give directions for the hearing of an assessment on costs and an inquiry as to damages. In addition the letter to NGC advised that the mortgages on the property, the subject matter of the injunctions, had been released. The act of releasing the mortgages was contrary to the terms of the injunctions granted on 23rd December 2015.

The very next day NGC, by its attorneys, wrote to the JSO and the Registrar, advising that the position taken by SIS was incorrect and that in the circumstances that applied the matter was not automatically struck out on 22nd March.

They therefore requested the Registrar to refrain from issuing any certificate to that effect. As well the letter advised the JSO that, without prejudice to the position taken in their letter, they intended to file a notice of application for an extension of time to fix a case management conference and further indicated their availability to attend before the judge at short notice.

These letters were copied to the attorneys for both companies. The application referred to in NGC’s letter, that is, a notice by it to extend the time for making an application for the fixing of a case management conference and seeking orders granting relief from sanctions; reinstating the claim and fixing a case management conference was filed on 7th June 2016.

Thereafter the parties attended before the judge on 10th June 2016. The submissions on that date related to two issues: the status of the action and whether, by releasing the mortgages on the property the subject matter of the injunctions, the companies were in breach of the court’s orders.

By her decision delivered on 10th June, the judge determined that “the claim was not struck out pursuant to CPR 27.3(4) since that rule was not meant to come into effect where the Court had been actively managing the case before the Defence was filed.” With respect to the release of the mortgages the judge held that the two companies, having failed to apply to have the orders discharged, were in breach of the orders of the court.

Accordingly on 10th June 2016, the judge made three orders.

1) The judge dismissed SIS’ application to have the injunction discharged and continued the freezing injunction granted on 23rd December 2015 until the hearing and determination of the arbitration proceedings intended to be commenced by NGC against SIS.

2) The second order declared that the deeds of release of the mortgages registered on 1st June 2016 be of no effect until further order and directed the Registrar General to expunge the said deeds from the records. The order also restrained SIS from dealing with the property the subject matter of the mortgages and the debenture. By this order the judge also gave NGC permission to withdraw its application dated 7th June 2016, that is, the application that ultimately sought to fix the case management conference.

3) By the third order the judge gave directions for the further conduct of the action by granting permission to NGC to file a reply and providing for: disclosure and inspection; the filing of statement of facts and issues; the filing of bundles of documents and the filing and exchange of witness statements. The order also fixed the case management conference for 14th February 2017.

SIS and Rain Forest Resorts appealed, and on November 23, 2016, the Court of Appeal comprising Justices Rajendra Narine, Judith Jones, and Peter Rajkumar, upheld the application of the two companies. They were contending that the judge was wrong when she ruled that the NGC matter had been struck out. The Court of Appeal ordered that the matter be struck out. They also ordered that the matter be sent back to the High Court to determine the question of damages. But that never happened.

As a result, SIS and Rain Forest applied for leave before the British Law Lords and lost.

The matter will return to the High Court.

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THE BEETHAM PROJECT 
 
 
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