Doris Thompson v Stephen J. Albury

• Jurisdiction: Bahamas
• Judge: Madam Senior Justice Deborah Fraser
• Judgment Date: 16 June 2023
• Docket Number: 2022/COM/COM/00035
• Court: Supreme Court (Bahamas)

IN THE MATTER of an application by DORIS THOMPSON for leave to institute proceedings against the Defendants pursuant to section 278(c) of the Companies Act 1992

IN THE MATTER of the Companies Act 1992 (the Act)

And

IN THE MATTER of ABACO OUTBOARD ENGINES LTD. (the Company)

Between

Doris Thompson (Complainant pursuant to Section 280 of the Act)

Intended Claimant

and

Stephen J. Albury

Jeffrey Albury (Sued in their capacity as Officers & Directors of the Company)

Intended Defendants

Before:

Her Ladyship The Honourable Madam Senior Justice Deborah Fraser

2022/COM/COM/00035

COMMONWEALTH OF THE BAHAMAS

IN THE SUPREME COURT

COMMERCIAL DIVISION

Striking Out — Order 18 Rule 19(1) of the Rules of the Supreme Court, 1978 — No Reasonable Cause of Action — Scandalous, Frivolous or Vexatious — Abuse of the Court's Process — Order 15 Rule 6(2)(a) of the Rules of the Supreme Court, 1978 — Proper Party — Sections 278 and 280 of the Companies Act, 1992 — Complainant under Companies Act, 1992 — Res Judicata

Appearances:

Mr. Kahlil Parker KC Ms. Roberta Quant and Ms. Leslie Brown for the Intended Claimant

Mr. Jacy Whittaker for the Intended Defendants

1 This is an application for Striking Out brought on behalf of Mr. Stephen J. Albury and Mr. Jeffrey Albury (“Intended Defendants”).

Background

2 Ms. Doris Thompson (“Intended Claimant”) commenced an action against Abaco Outboard Engines Ltd (“Company”) – CLE/GEN/00513 of 2011 for breach of contract due to the Company's failure to provide an engine the Intended Claimant purchased from it for her boat. Default Judgment of Appearance was entered against the Company on 12 April 2011. On 22 November 2013, an assessment of damages was heard before Deputy Registrar Marilyn L. Meeres (as she then was) where she ruled that the assessed total damages owing to the Intended Claimant from the Company was $26,890.75 with interest thereon at the statutory rate. Ms. Thompson entered Final Judgment against the Company on 25 November 2013.

3 Subsequently, on 29 January 2018, an Examination of the Judgment Debtor was heard by Deputy Registrar Camille Darville-Gomez (as she then was) where Mr. Stephen Albury (General Manager, Secretary and Director of the Company – “Mr. Albury”): (i) stated that he was aware of the $26,890.75 debt owing to the Intended Claimant; (ii) stated that the Company was in a position to satisfy the debt; and (iii) gave an undertaking on behalf of the Company to pay the debt. The Deputy Registrar read those statements back to Mr. Albury and he confirmed that they were correct. To date, despite several attempts by the Intended Claimant to enforce the judgment, the debt remains owing.

4 On 20 July 2022, the Intended Claimant filed another Writ of Summons (“New Writ”) as well as a Summons and Affidavit requesting, inter alia, an order of the Court pursuant to section 278 (c) of the Companies Act, 1992 (“Act”) and under the inherent jurisdiction of the court declaring her a fit and proper person to bring an action against the Intended Defendants.

5 The New Writ claims, inter alia, breaches of fiduciary duty by the Intended Defendants as well as oppression, unfair oppression and/or disregard by the Intended Defendants as against the Intended Claimant.

6 Prior to the substantive hearing, on 16 August 2022, the Intended Defendants filed an application to have the Intended Claimant's New Writ struck out.

ISSUES

7 The issue that the Court must decide is whether the new Writ ought to be struck out because: (i) it discloses no reasonable cause of action; (ii) it is scandalous, frivolous or vexatious; (iii) it is an abuse of the court's process; and (iv) improper parties are being sued.

Intended Defendants' Submissions

8 The Intended Defendants' counsel submits that the New Writ ought to be struck out because: (i) it discloses no reasonable cause of action; (ii) it is scandalous frivolous or vexatious; (iii) is an abuse of the Court's process; and (iv) improper parties are being sued. The Intended Defendants' counsel draws the Court's attention to Order 18 Rule 19(1)(a),(b) and (d) of the Rules of the Supreme Court, 1978 (“RSC”) which provide:

“ 19. (1) The Court may at any stage of the proceedings order to be struck out or amended any pleading or the indorsement of any writ in the action, or anything in any pleading or in the indorsement, on the ground that —

(a) it discloses no reasonable cause of action or defence, as the case may be; or

(b) it is scandalous, frivolous or vexatious; or…..

(d) it is otherwise an abuse of the process of the court, and may order the action to be stayed or dismissed or judgment to be entered accordingly, as the case may be.”

9 Counsel then refers to Halsbury's Laws of England 4 ^th Edition, at paragraphs 430-435 for the following passage:

“ ….the powers are permissive….and they confer a discretionary jurisdiction which the court will exercise in light of all the circumstances concerning the offending pleading…Where a pleading discloses no reasonable cause of action….it would be ordered struck out or amended, if it is capable of amendment…. No evidence including affidavit evidence is admissible on an application on this ground and since it is only the pleading itself which is being examined, the court is required to assume that the facts pleaded are true and undisputed…. However, summary procedure…will only be applied to cases which are plain and obvious, where the case is clear beyond doubt, where the cause of action or defence is on the face of it obviously unsustainable, or where the case is unarguable…”

10 This, the Intended Defendants' counsel submits, admonishes the Court to exercise its discretionary powers to strike out pleadings with the greatest care and circumspection. Learned counsel further asserts that pleadings should only be struck out where it is plain and obvious that it cannot succeed.

11 The Intended Defendants' counsel then refers to Johnson v Gore Wood & Co [2002] 2 AC 1 [22] (“ Gore Wood”), where Lord Bingham made the following pronouncements:

“ …[the] inherent power which any court of justice must possess to prevent misuse of its procedure in a way which, although not consistent with the literal application of its procedural rules, would nevertheless be manifestly unfair to a party to litigation before it, or would otherwise bring the administration of justice into disrepute among right thinking people…

…broad merits based judgment which takes account of the public and private interests involved and also takes account of all the facts of the case, focusing attention on the crucial question whether, in all the circumstances, a party is misusing or abusing the process of the court…”

12 Counsel also relies on the case of Allen v The Grand Bahamas Port Authority, Ltd. and Others [2011] 3 BHS J. No. 18 for the following:

“ I am mindful that the discretion to dismiss cases pursuant to order 18 rule 19 should be exercised sparingly. However, for the foregoing reason as well as those advanced by the counsel for the Defendants and on the authorities provided, it would, in my judgment, be an abuse of the process of Court to permit the plaintiff to proceed with this action as presently pleaded. In that regard, I accept the submissions of counsel for the defendants that the amended writ herein discloses no reasonable cause of action, that it is scandalous, frivolous, and vexatious and that it is otherwise an abuse of the process of this court.”

13 The Intended Defendants' counsel asserts that the present claim is an abuse of the Court's process for the aforementioned reasons along with the following reasons:

• • The action was brought on the “wrong footing” as the Intended Claimant is not a shareholder of the Company.

• • The Intended Claimant is not a complainant under the Act;

• • This is not an internal dispute for the Intended Claimant to bring an action under the Act;

• • There is a pending action that has been filed by the Intended Claimant against the Company and this action is res judicata or there is an issue of estoppel as it appears to be the same cause of action; and

• • It was unlawful to add the Intended Defendants as parties to the claim.

14 The Intended Defendants' counsel further submits that section 280 of the Act has been misapplied. Section 280(1) and (2) of the Act read:

“ 280. (1) A complainant may apply to the court for any order against a company or a director or officer of that company to restrain oppressive action.

(2) If upon an application under subsection (1), the court is satisfied that in respect of a company or any of its affiliates —

(a) any act or omission of the company or any of its affiliates effects a result;

(b) the business or affairs of the company or any of its affiliates are or have been carried on or conducted in a manner; or

(c) the powers of the directors of the company or any of its affiliates are or have been exercised in a manner, that is oppressive or unfairly oppressive to, or that unfairly disregards the interest of any shareholder or debenture holder, creditor, director or officer of the company, the court may make an order to rectify the matter complained of.”

15 Section 278 of the Act states:

“ In this Part —

“ action” means an action under this Act;

“ complainant” means —

(a) a shareholder or debenture holder or a former holder of a share or debenture of a company;

(b) a director or an officer of former director or officer of a company or its affiliates;

(c) any other person, who in the opinion of the court is a proper person to institute an action under this Part (emphasis added).

16 Counsel's position is that the Intended Claimant is not a complainant as provided under the Act, as she is not an “oppressed shareholder”. Thus, the action is misconceived and must fail.

17 Counsel advances his position by relying on the case of Lady Henrietta St. George v Sir Jack...