Russell v Johnson and Zia International Ltd

JurisdictionBahamas
CourtCourt of Appeal (Bahamas)
JudgeSmith, J.A.,DaCosta, J.A
Docket NumberCivil Side No. 7 of 1981
Date26 March 1982

Court of Appeal

Luckhoo, P.; Smith, J.A.; DaCosta, J.A.

Civil Side No. 7 of 1981

Russell
and
Johnson and Zia International Ltd.

Injunction - Former shareholders of company — No locus standi to apply for injunction

Contract - Sale of shares — Breach — Remedies available

JUDGMENT OF THE COURT:
1

At the conclusion of the arguments in this appeal on March 23, 1982 we allowed the appeal, set aside the order of the trial judge granting an injunction with costs to the appellant to be agreed or taxed. We promised to put our reasons in writing and we now do so.

2

On March 31, 1981 Malone, J. granted an injunction restraining the defendant (appellant) his servants or agents from entering or otherwise trespassing on premises of the second plaintiff (second respondent) as described in paragraphs 3, 4 and 5 of Mr. S. Wilchcombe's affidavit of the 11th March, 1981 and in anyway interfering with the plaintiff's use and enjoyment of the said premises.

3

By an agreement made the 12th January, 1979 and contained in a Letter of Intent Mark Johnson agreed to sell to Audley Russell all the share capital of Zia International Ltd. (“Zia”) of Freeport, Grand Bahamas for the sum of U.S. $550,000.

4

Under the terms of the sale the purchase price for the shares was to be paid by installments at the times and to the persons stipulated in the contract. Clause 11 of the Letter of Intent is important. It provides, in effect, that after certain sums were paid, the pledge of the shares in the Company (i.e. Zia) back to the seller, to secure the payment of part of the purchase price, should cease to have effect. The logical inference from this was that the shares in Zia were to be pledged as security for payment of part of the purchase price.

5

It appears that Russell as the new controlling shareholder in Zia entered upon the management of the properties owned by Zia and commenced to make payments under the terms contained in the Letter of Intent. A dispute about payments arose and according to Russell he withheld payments for the reasons stated in his affidavit sworn on March 20, 1981. The dispute culminated in an application to the Court by the respondents for an injunction restraining the appellant, his servants or agents from entering on the respondents' premises. The writ was issued on March 3, 1981, and the Summons for an Injunction is dated March 12, 1981.

6

Mr. Wallace-Whitfield, to whom the Court is always indebted...

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