Lordly Trading Company Ltd et Al v Cunningham Nee Curry et Al

• Jurisdiction: Bahamas
• Judge: Isaacs, J.
• Judgment Date: 15 February 2002
• Court: Supreme Court (Bahamas)
• Docket Number: 994 of 2000
• Date: 15 February 2002

Supreme Court

Isaacs, J.

994 of 2000

Lordly Trading Company Ltd. et al

and

Cunningham Nee Curry et al

Appearances:

Mr. it. Rigby for the first defendant.

Mr. R. Sweeting for the plaintiffs.

Company law - Appointment of a receiver — No affidavit of fitness filed — Whether the failure to file an affidavit of fitness with respect to the receiver was a ground for the discharge of his appointment — Finding that there was an element of discretion with respect to the affidavit of fitness so that the absence of said affidavit did not affect the efficacy of the receiver's appointment — Whether the Deputy Provost Marshal could act as receiver in a private matter between two individuals — Finding that there was no conflict between the duties as Deputy Provost Marshal and receiver since he was serving in two unrelated capacities both under the aegis of the court.

Isaacs, J.

1 On 16th November, 2001 I heard the first defendant's applications in Chambers. When we adjourned, I promised to deliver my decision: Although no date for the ruling was given, an early date must have been anticipated by the parties given the nature of the applications. I must therefore, at the outset, apologise for the delay in readying this ruling.

2 On 18th September; 2000 the plaintiffs, Lordly Trading Company Limited and Xavier Overseas Limited, filed a generally endorsed Writ of Summons naming seven defendants. The first plaintiff is a Panamanian company and the second plaintiff is an International Business Company (IBC). The first named defendant, Gillian Gia Ingraham nee Curry, is a former employee of United Management Services Limited, a company that provided financial and management services to the plaintiffs. Mrs. Ingraham is the primary focus of the plaintiffs' claim inasmuch as they contend that it was she who defrauded them of, and converted some $1,144,990.52 of their funds.

3 Also on 18th September, 2000, the plaintiffs sought and obtained an Order against the first defendant (the Order) whereby the first defendant was, inter alia, restrained until trial or further Order from transferring dealing with changing diminishing mortgaging assigning or disposing of the assets consisting of $1,144,990.52 which were transferred from the plaintiffs' accounts (the Proprietary Freezing Injunction); not to remove from The Bahamas or in any way dispose of or deal with or diminish the value of any of her assets which are in The Bahamas or out of The Bahamas whether in her own name or not whether solely or jointly owned up to the value of $1,500,000.00 (the Mareva Injunction); to inform the plaintiffs in writing at once in any event within two days of service of the Order upon her of all her assets whether inside or outside The Bahamas and whether in her own name or not and whether jointly owned and giving the value location and details of all such assets. This information was to be confirmed by affidavit served on the plaintiffs' attorneys within seven days of service of the order on the first defendant (the Disclosure Order). The Order also provided for the appointment of a Receiver, Mr. Patrick Wright, Deputy Provost Marshal. He was charged to collect, get in and receive all the assets that had been purchased with the plaintiffs' funds including and not limited to those mentioned in the schedule to the Order (the Receivership Order).

4 The first defendant seeks to move the court via three summonses filed in the above-intituled action. The first summons was filed on 20th September, 2001; the second on 20th September, 2001; the third on 19th October, 2001. There was also a summons filed on 15th November, 2001. The first summons sought an Order to incorporate the following terms:

“…any and all proceedings and any legal and equitable execution against the first defendant as is now authorized by the Order dated 18th September, A.D., 2000 (and extended by any other Order) be stayed…;

….restraining the Deputy Provost Marshall, Mr. Patrick Wright, in his capacity as Receiver whether by himself his agents or nominees or appointees otherwise howsoever acting in purported pursuance of the duties and functions of the Receiver in virtue of the aforementioned said Order or otherwise, from taking any steps in the proceedings now pending within and outwit the jurisdiction as might anticipate or prejudice the grant of relief claimed in the said Summons and the rights of the first defendant pending the hearing of the said application or until further order…;

…that the aforesaid Order granted on the 18th day of September, A.D., 2000 in so far as the same contains errors by reason of accidental slips or omissions or otherwise may be amended pursuant to R.S.C., Order 20, r.11, or replaced or supplemented by another such Order (as may be required in the interest of justice) so as to reflect the manifest intention of the Honourable Court as to the liberty to apply…

…that provision may be made for (1) the usual undertakings as to the third party indemnity and any consequential damage which the court may find the first and second plaintiff ought to pay, and (2) such allowances on account of the ordinary business and legal expenses of the first defendant as may to the court seem just.

…that upon amendment or replacement or supplementation (as the case may be) being duly effected the aforesaid Order may stand duly perfected.”

5 The second summons sought an Order “pursuant to R.S.C., Order 32, r.6, or otherwise under the inherent jurisdiction of the court that the Order granted on the 1e day of September, A.D., 2000 (Receivership Order') whereby (inter alia) Patrick Wright, Provost Marshall, was appointed Receiver over the assets of all the first defendant (notwithstanding the making of the Receivership Order) may be set aside or varied or amended (as the case may be)”. Also sought were Orders to appoint some other fit and proper person as Receiver; that Patrick Wright, and, inter alias, his servants be restrained from taking any further steps to collect in, liquidate cash in or otherwise realize any property constituting the assets of the first defendant; and for a stay of all proceedings and executions consequent upon the Receivership Order against the first defendant.

6 The third summons was an application pursuant to RSC Order 19, r.1 to dismiss the action on the basis of the plaintiffs' failure to serve a Statement of Claim within the period as prescribed by RSC Order 18, r.1 and, alternatively, for an Order dismissing the action pursuant to RSC Order 19, r.1(d) in that the writ in the action and the proceedings are otherwise an abuse of the process of the court.

7 All of the Summonses requested that costs be provided for. The summonses were heard in Chambers on 16th November, 2001. There was a fourth summons pertaining to a disclosure order and security for costs but these issues were not addressed fully in this hearing because the affidavit in support of the summons was not filed and counsel agreed the issue could await the decision on striking out the action.

8 Counsel for the first defendant broke down the applications before the court into five parts:

1

the discharge or variation of the Order whereby Patrick Wright was appointed Receiver of all the assets of the first defendant; 2. alternatively, that Mr. Wright be removed and replaced as Receiver; 3. an injunction to restrain Mr. Wright from acting as such Receiver; 4. dismissal of the action for abuse of process of the court; and 5. ancillary interlocutory relief inclusive of a disclosure order and security for costs.

9 I propose to address the first four of counsel's submissions in the order that he raised them during the course of the hearing.

10 There is no gainsaying that the court may discharge or vary the Order made on 18th September, 2000 ( RSC, Order 32, r. 6). Also, the court has an inherent power to protect its processes from abuse by parties seeking to use such processes for unacceptable ends. That being said I do not accept the submission that a failure to file an affidavit of fitness with respect to Mr. Wright is a ground for the discharge of his appointment as a Receiver. The Note 30/1/8 to Order 30 in the Supreme...