Deyvon Jones v FML Group of Companies Ltd

JurisdictionBahamas
CourtCourt of Appeal (Bahamas)
JudgeMadam Justice Crane-Scott, JA
Judgment Date18 May 2022
Neutral CitationBS 2022 CA 068
Docket NumberSCCivApp. No. 69 of 2021
Between
Deyvon Jones
Appellant
and
FML Group of Companies Limited
Respondent
Before:

The Honourable Sir Michael Barnett, P

The Honourable Madam Justice Crane-Scott, JA

The Honourable Mr. Justice Evans, JA

SCCivApp. No. 69 of 2021

IN THE COURT OF APPEAL

Civil Appeal — Appeal from dismissal of Appellant's claim for unpaid remuneration in breach of employment contract — Appeal from dismissal of Appellant's alternative claim for damages for Constructive Dismissal — Repudiation — Job Abandonment — Burden of Proof — Legal Burden — Ultimate Burden — Persuasive Burden — Evidential Burden — Sections 82, 83, 84 & 85 Evidence Act

On or about 1 May 2015, the Appellant was employed by FML (the Respondent) under an unwritten contract of service as its Chief Operations Officer. His remuneration, however, was set out each year under a series of written Compensation Agreements signed by FML The last of these agreements was dated 15 May 2017 and was set to expire on 30 April 2018.

On 1 November 2017, FML purported to enter into a written Management Agreement with an entity known as Blue Star Holdings Limited under which “Blue Star” (also called “FMLX”) would manage and profitably operate FML's Store Network consisting of 19 stores According to a recital in the Agreement, FML's Store Network was on that date being operated as a gaming operation known as “Everybodywins”. The Blue Star Agreement was signed by the Appellant, ostensibly on behalf of Blue Star of which he was director and President. However, the evidence established that Blue Star had in fact not been legally incorporated until 19 days later.

On 1 November 2017 as well, the Appellant (and 2 other FML employees) signed a Letter of Understanding (“LOU”) with the Chairman of FML. The LOU records the fact of an arrangement between FML and the Appellant and 2 other FML employees whereby they had sought and obtained FML's permission to “join” a company known as Blue Star Holdings Limited (“Blue Star”) for the purpose of operating and managing 19 of FML's web stores, referred to in the LOU as “The Express Stores”.

The LOU further contained an “understanding” by Blue Star (which, was not a party to the LOU) that Blue Star would, inter alia, (i) pay any and all salaries associated to these staff; (ii) pay all National Insurance fees associated with their salaries; and (iii) pay all fees to the Bahamas Gaming Board associated to these employees.

In early February 2018, FML became aware of what appeared to be suspicious customer activity at certain store locations managed under the Appellant's portfolio. The activity involved what FML claimed was unusually high deposit/withdrawal activity with no clear gaming purpose. FML's internal investigations continued and by mid-February 2018 the matter was escalated to the level of the Board of Directors.

On Friday 23 February 2018, FML issued the Appellant with a formal letter ostensibly addressed to Blue Star (for his attention) which terminated the Blue Star Management Agreement with immediate effect.

FML held a subsequent meeting on 26 February 2018 with the Appellant and legal counsel to discuss the status of his employment with FML. On 27 February 2018, FML received legal advice that the Appellant had not returned to work and had abandoned his job and that due to the infractions, he should be summarily dismissed if he returned to work.

By way of a legal letter dated 12 March 2018, the Appellant's legal representative wrote to FML on his behalf alleging that he had been unfairly/constructively dismissed.

Shortly thereafter, by way of a specially endorsed Writ and Statement of Claim filed on 26 March 2018, the Appellant instituted an action in the Supreme Court against FML, seeking damages for breach of contract, or alternatively, for constructive dismissal.

Following a trial in the Supreme Court, the trial judge handed down a written Decision dismissing the Appellants claims. He appealed to the Court of Appeal.

After hearing the appeal, the Court reserved its decision.

Held: (Barnett P dissenting) Appeal allowed. The Respondent shall pay to the Appellant the sum of $120,000.00 being his unpaid salary as the Respondent's COO for the 4-month period (November 2017 to February 2018). The Respondent shall also pay the Appellant interest on the said sum pursuant to the Civil Procedure (Award of Interest) Act, 1992 at the rate of 6 % per annum from 26 th March 2018 until payment in full.

The usual order is that costs follow the event. As presently advised, that is the appropriate order to be made following the disposition of this appeal. The Respondent shall pay the Appellant's costs of the appeal as well as the Appellant's costs in the court below, to be taxed if not agreed.

Per Crane-Scott, JA: It need hardly be said that these are civil proceedings. It is a basic rule of evidence that whoever desires any court to give judgment as to any legal right or liability dependent on the existence of facts which he asserts, must prove that those facts exist. [See generally sections 82–85 of the Evidence Act, Ch. 65.]

As we see it, the Appellant's evidence had clearly established a prima facie case of breach of contract by FML under a written Compensation Agreement signed by FML (as his employer) on 15 May 2017 whereby FML was contractually obligated to pay him a monthly salary of $30,000.00 together with a revenue share of 4% of the net generated revenue (NGR) on “new products only”.

In the light of section 83 of the Evidence Act and FML's pleaded case, the evidential burden rested on FML during the trial to adduce evidence to prove the assertions made at paragraphs 2 and 3 of its Defence, namely, (i) that the salary in the Compensation Agreement had been “changed orally” and his “old” salary was “varied” and replaced by “new” terms orally agreed between them; and further, that (ii) the Appellant had in fact been paid the “varied” salary for the relevant period (i.e. for the 4 month from 1 November 2017 through February 2018).

While Craig Flowers' testimony was that FML had agreed to compensate the Appellant “based on” the Blue Star Agreement, his evidence fell far short of providing any details as to precisely how (and when) the relevant Compensation Agreement had been “changed orally” as FML had claimed in its Defence. Most importantly, Craig Flowers gave no evidence whatsoever as to what was the new “varied” salary or compensation which FML and the Appellant had (as it claimed) verbally agreed that the Appellant was to pay himself out of the income from the Express Stores after 1 November 2017.

What is even more astounding is that apart from merely stating that the Appellant had in fact been compensated from November 2017 based on the Blue Star compensation agreement; and that the Appellant could in effect “keep as compensation the lion's share of the profits generated after paying the expenses of those stores”, FML produced no evidence or accounting whatsoever to support these crucial assertions of fact.

Having reviewed the pleadings together with the totality of the evidence, we are satisfied that the Appellant had met the persuasive or legal burden of proving his assertion that his contract had been breached and he was legally entitled to be paid his unpaid salary under a Compensation Agreement signed by FML which obligated FML as his employer to pay him at the very minimum, a monthly salary of $30,000.00 for the 4 months claimed.

In the result, we quash the learned judge's decision which dismissed the Appellant's breach of contract claim and order FML to pay the Appellant the sum of $120,000.00 (being 4-months' salary due to him as FML's COO for the period November 2017 through February 2018).

Per Evans, JA: The reason which the learned judge gave for rejecting the breach of contract claim is set out clearly in his judgment. At paragraph 74 the learned judge stated as follows:

“[74] The Plaintiff claims to not have been paid for the months November and December 2017 and January and February 2018.

However, no evidence of proof of working has been produced by the Plaintiff. Therefore, it is virtually impossible for the court to decide that issue.”

In essence, as posited by Crane-Scott JA, the learned judge found that the Appellant had failed to produce evidence of his having worked so as to establish his entitlement to unpaid salary for the period November 2017 to February 2018 and that his claim for breach of contract consequently failed.

The learned judge's finding on this point was clearly inconsistent with the Respondent's pleaded defence and was not supported by any evidence led before the Court. My sister has dealt sufficiently with the legal principles governing the burden of proof during trials and it serves no purpose for me to repeat them here. It suffices to say, that the Respondents having based their case on the assertion that the Appellant had been paid the money which he was claiming, they had the responsibility to lead evidence to support that assertion.

Per Barnett P., (Dissenting): In my judgment, the trial judge was entitled to find that the obligation to pay $30,000.00 per month under the compensation agreement was varied after the 1st November, 2017 by the management agreement and the letter of understanding. In my judgment, those two documents read together made it clear that the appellant's compensation for his work with the Respondent would now come from the monies earned under the management agreement. The letter of understanding said Blue Star would “Pay any and all salaries associated to these staff” which included the Appellant.

I am fortified in this view by the fact that the Appellant never demanded $30,000.00 after November, 2017. It is simply not credible that the Appellant would not have demanded his $30,000.00 during the period November, 2017 to February, 2018, if he believed that he was entitled to $30,000.00 per month. I would dismiss the...

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