Essex Global Capital, Llc v Purchasing Solutions International, Inc.

• Jurisdiction: Bahamas
• Judge: Charles, J.
• Judgment Date: 15 February 2019
• Court: Supreme Court (Bahamas)
• Docket Number: 2018/CLE/gen/177

Supreme Court

Judge(s):

Charles, J.

2018/CLE/gen/177

Essex Global Capital, LLC

and

Purchasing Solutions International, INC

Appearances:

Mr. Ferron Bethell with him Mrs. Viola Major of Harry B. Sands, Lobosky & Company for the Plaintiff

Mr. Stephen Turnquest with him Ms. Syneisha Bootle of Callenders & Co. for the Defendant

Service – Service outside jurisdiction – Action in breach of contract within jurisdiction – Disclosure – Evidence – Test for grant of leave – Whether plaintiff had to show good arguable case that court had jurisdiction – Whether there was a serious issue to be tried – Whether there was full and fair disclosure – Whether affidavit contained hearsay and inadmissible evidence – Whether application to discharge ex parte order for service outside jurisdiction ought to be discharged

On 19 February 2018, on an ex parte Summons, the Plaintiff sought leave to serve Notice of the Writ of Summons upon the Defendant outside of the jurisdiction. The application was supported by an affidavit of Lakeisha Hanna sworn to on 19 February 2018. On 26 March 2018, the Court granted leave to the Plaintiff. On 26 April 2018, the Defendant filed a Conditional Appearance. On 10 May 2018, the Defendant applied to have the Order granting leave to serve out of the jurisdiction discharged. The Defendant alleged that (i) the Plaintiff has failed to make full and frank disclosure to the Court; (ii) the Court did not have before it all the admissible material relevant to the case and (iii) having regards to all the circumstances of the case, it is not a proper case for service out of the jurisdiction within Ord. 11 r. 4 and the Court in its discretion, should have refused to grant leave for such service.

The Plaintiff asserted that it has satisfied the threshold test for leave to serve out of the jurisdiction and that the Defendant's application to discharge ought to be dismissed with costs.

HELD: Dismissing the application to discharge the ex parte Order for service out of the jurisdiction with costs and finding that the Plaintiff, having disclosed all relevant materials for its claim, the matters complained of by the Defendant raise a serious issue to be tried.

(1) In order to enable the Court to decide an application under RSC, Ord 11, r 1 (f) (iii), it was necessary for the party making the application to supply all the material facts within his knowledge. The Court would then, without trying to determine the merits of the action, consider all the relevant documents, even though that might involve some investigation, and make an order accordingly. In the present action, the Court finds that the Plaintiff has done so.

(2) When considering an application for leave to allow service of proceedings out of the jurisdiction under Ord 11, r.1(1) the court, before exercising its discretion to grant leave, had to consider (i) whether there was a good arguable case that the court had jurisdiction under one of the paragraphs of r.1(1), and (ii) whether there was a serious issue to be tried so as to enable exercise of the discretion to grant leave under r 4(2). In particular, the test of the strength of the case on the merits which a plaintiff had to establish for the grant of leave to serve proceedings out of the jurisdiction was merely whether the evidence disclosed that there was a serious issue to be tried, not whether he had a good arguable case: Seaconsar Far East Ltd v. Bank Markazi Jomhouri Islami Iran [1993] 4 All E.R. 456 at page 457.

(3) The Court has a discretion to discharge an ex parte order granted at a hearing for failure on the part of the applicant/plaintiff to give full and frank disclosure, but this is not the inevitable consequence of every non-disclosure. The Court will have regard to all the circumstances of the case and will assess the gravity of the alleged breach, the degree and extent of culpability with regard to the non-disclosure, the importance and significance of the facts not disclosed to the outcome of the application, any excuse or explanation offered, the severity and duration of any prejudice caused to the respondent/defendant and whether the non-disclosure can be and, if so, has been, remedied. In my opinion, the Plaintiff has sufficiently disclosed all relevant material to the Court and it is now time for the Defendant to file and serve his Defence.

(4) The Court declined to make an order to set aside service under Ord. 12 r.7. The facts pleaded at paragraphs 5–22 of the Statement of Claim are sufficient, if proved, to establish a cause of action. These paragraphs of the Statement of Claim were reiterated in the Hanna 1st affidavit seeking an order for service out of the jurisdiction. On the evidence before the Court, there is clearly a serious issue to be tried: Seaconsar Far East Ltd at page 457 relied upon.

RULING

INTRODUCTION

Charles, J.

1 This is an application by the Defendant (“Purchasing Solutions”) seeking to discharge the ex parte Order which I made on 26 March 2018 granting leave to the Plaintiff (“Essex”) to serve Notice of the Writ out of the jurisdiction and set aside all subsequent steps and proceedings taken by Essex. The application is made pursuant to Order 12 Rule 7 of the Rules of the Supreme Court (“ RSC Ord. 12 r. 7”) and is supported by two affidavits of J. Mike Williams (“Mr. Williams”) filed on 23 May 2018 and 11 January 2019, respectively. Mr. Williams' 2nd affidavit is filed without prejudice with the intention of objecting to the affidavit of Lakeisha Hanna (“Hanna 2nd affidavit”) filed on 4 January 2019.

CHALLENGE TO THE ADMISSIBILITY OF HANNA 2ND AFFIDAVIT FILED ON 4 JANUARY 2019

2 Before the application to discharge even got off the ground, Purchasing Solutions launched an attack on the Hanna 2nd affidavit. I shall firstly address this challenge.

3 Learned Counsel Mr. Turnquest appearing for Purchasing Solutions submitted that the Hanna 2nd affidavit filed on 4 January 2019 is inadmissible in this proceeding because it is in substance one sworn on information and belief. He reasoned that while the ultimate issue is whether leave to serve outside the jurisdiction was properly granted, the underlying issue is one which goes to the heart of the dispute between the parties namely, whether the claim is well-founded on its merits. According to him, Ord. 41 r. 5 (1) states as follows:

“Subject to Order 14, rules 2(2) and 4(2), to paragraph (2) of this rule and to any order made under Order 38, rule 3, AN AFFIDAVIT MAY CONTAIN ONLY SUCH FACTS AS THE DEPONENT IS ABLE OF HIS OWN KNOWLEDGE TO PROVE.”[Emphasis added]

4 And subsection (2) states:

“An affidavit sworn for the purpose of being used in interlocutory proceedings MAY contain statements of information and belief with the sources and grounds thereof.”[Emphasis added]

5 Learned Counsel Mr. Turnquest submitted that the present application to discharge the ex parte order is not an interlocutory proceeding and therefore, to the extent that Essex wishes to adduce evidence, it was obliged to act in accordance with Ord. 51 r. 5(1). In other words, the effect of this provision is that Mrs. Hanna can only swear to facts within her own knowledge. An exception is made for interlocutory applications.

6 The question then is whether the present application to discharge is interlocutory or not?

7 Case law provides a helpful aid. Learned Counsel Mr. Turnquest relied on the cases of Rossage v. Rossage and Others [1960] 1 All E.R. 600; Re J (an infant) [1960] 1 All E.R. 603 and Gilbert v. Endean (1878) 9 Ch. D. 259 to demonstrate that the present application is final and not interlocutory, therefore the Hanna 2nd affidavit is inadmissible. In Rossage, a father applied in divorce proceedings for a suspension of the mother's right of access to the child of the marriage. The application was supported by affidavits consisting largely of scandalous allegations against the mother based on hearsay. It was common ground that rules of court required affidavits to contain only matters of which the deponent had first-hand knowledge unless the affidavit was intended for use in an interlocutory proceeding. The hearsay material contained in the affidavits sought to rely upon was ruled to be irrelevant and inadmissible. It was held that though interlocutory in form, the application to suspend a mother's right of access to her child was determinative of the rights of the parties and hence not an interlocutory proceeding.

8 Then, in Re J (an infant), a mother's application for leave to remove a ward of court from the jurisdiction, was supported by an affidavit sworn on information and belief. Notwithstanding (as the court noted) that directions in infancy cases are never final and that the application might well be interlocutory for appeal purposes, the affidavit evidence was inadmissible because the application was not being made to preserve the status quo for the purpose of obtaining directions as to procedure and was therefore not interlocutory for the purpose of evidence admissibility.

9 In Gilbert v. Endean, the plaintiff had obtained an order against a defendant for the defendant to give a bond for payment of money to the plaintiff and to deposit some shares as security for compliance. Subsequently, the plaintiff entered into a compromise with the defendant by which the plaintiff agreed to accept payment of a smaller sum. The plaintiff later sought to proceed under the initial order on the basis that the compromise was reached because the defendant had concealed a material fact, that is, the defendant's father had died during the negotiations for the compromise whereas the plaintiff had been led to believe that the father was alive and would not help the defendant. In other words, the defendant was not in the penniless state that he had led the plaintiff to believe. The court at first instance allowed the plaintiff to enforce the initial order. Cotton,...