Bay Trust Corporate Services Ltd v Karen Acosta Longsworth
| Jurisdiction | Caribbean States |
| Judge | Mr Justice Burgess,Mr Justice Adrian Saunders,Mme Justice Rajnauth-Lee,Rajnauth-Lee,Jamadar,Anderson,Burgess |
| Judgment Date | 27 May 2020 |
| Date | 27 May 2020 |
| Docket Number | CCJ Civil Appeal No. BZCV2019/001 |
| Court | Caribbean Court of Justice |
[2020] CCJ 8 (AJ) BZ S
IN THE CARIBBEAN COURT OF JUSTICE
Appellate Jurisdiction
the Honourables Mr Justice A Saunders, PCCJ
Mr Justice W Anderson, JCCJ
Mme Justice M Rajnauth-Lee, JCCJ
Mr Justice A Burgess, JCCJ
Mr Justice P Jamadar, JCCJ
CCJ Civil Appeal No. BZCV2019/001
Belize Court of Appeal No. 12 of 2013
Mr Rodwell Williams SC, Ms Lissette Staine and Mr Adler Waight for the Appellant
Mr Eamon Courtenay SC and Ms Naima Barrow for the Respondent
Constructive dismissal — Section 42A(1) of Belize Labour Act 2011 — purpose of statutory provisions — tests for constructive dismissal — contract test — unreasonableness test — rules of attribution — controlling mind and will — agency — special rule of attribution — identifiable official
The Appellant, Bay Trust Corporate Services Limited (“the Company” or “BTCSL”) and the Respondent, Karen Acosta Longsworth (“Ms Longsworth”) raised before the Caribbean Court of Justice (“the Court”) two important issues: (1) whether the conduct of Mr Glen Wilson (“Mr Wilson”), the Chairman/President of the Company, could amount to constructive dismissal of Ms Longsworth; and (2) whether the conduct of Mr Wilson could be attributed to the Company. The Court, in its judgment delivered by Justices Rajnauth-Lee and Burgess, determined these issues in the affirmative.
On 1 February 2002, Bay Trust International Limited (“BTIL”) was incorporated in Belize to carry on business as an international financial services provider. By a contract of employment dated 28 January 2002, Ms Longsworth was employed to manage BTIL. In keeping with the terms of the contract, she was appointed a Director of BTIL in 2002. Between 2002 and 2010, Ms Longsworth was issued shares, eventually resulting in her holding 30% of BTCSL's shareholding with Mr Wilson holding 70%. Although the factual circumstances surrounding the incorporation of BTIL and BTCSL are unclear, the Court was satisfied that BTCSL has not contended that Ms Longsworth sued the wrong party.
This matter contains a significant number of background events extending from 2010 to 2011. These include numerous exchanges between Mr Wilson and Ms Longsworth, largely chronicled by extensive email correspondence. Ms Longsworth alleged that from around October 2010, the relationship between her and Mr Wilson began to deteriorate. Despite this, however, on 3 January 2011, Ms Longsworth signed a supplemental written agreement with BTCSL to continue in its employment as Managing Director for an additional period of five years.
As the trial judge noted, the email evidence before her revealed that, around March to July 2011, disagreements erupted continuously between Mr Wilson and Ms Longsworth. Their relationship disintegrated to the point where there were shouting matches between them in the workplace and in front of staff. On 27 June 2011, she emailed him complaining that he had repeatedly embarrassed and belittled her in front of staff. She called upon him to desist from obstructing her management of the Company. On 9 July 2011, Mr Wilson replied by email that he had every right to involve himself in company matters.
It was against this volatile background that on 16 July 2011, Mr Wilson sent an email to Ms Longsworth regarding the future management of BTSCL and BTIL. In the attachment to the email entitled ‘The Way Forward’, Mr Wilson indicated that, in his capacity as majority shareholder and Chairman/President of both BTCSL and BTIL, he had taken over the management of both companies. The attachment contained, among other things, a detailed description of the new assignment of Ms Longsworth as General Manager Trusts as well as other changes in the Company. As General Manager, she would become part of the Trust Department. It is to be noted that Ms Longsworth's list of duties as Managing Director, as contained in the 2011 contract, had included her management of BITL and BTCSL in its entirety and her supervision of the Accounts Department, the Trust Department and the Companies Department, as well as several other duties.
Ms Longsworth replied, questioning Mr Wilson's ability to take over management of both companies when her primary duty as Managing Director was to manage both BTIL and BTCSL. She asked, in respect of Mr Wilson's re-designation of her position, whether he was demoting her from her Managing Director's position.
Mr Wilson replied, indicating that he was taking over management forthwith as it was his prerogative to do so, and stating that Ms Longsworth would still remain as a director with the same benefits. Mr Wilson and Ms Longsworth met on 18 July 2011. She told him that she felt that this was a breach of her contract because all her duties as Managing Director had been taken away. His response was that her position of Managing Director had not been confirmed at the recent annual general meeting, that his action was not in breach of contract, and that he was entitled to make the changes. The disagreement was not resolved.
Following the meeting on 18 July 2011, Ms Longsworth wrote to Mr Wilson indicating that she had sought legal advice and was advised that the actions described in ‘The Way Forward’ amounted to a breach of her contract. She also indicated that she was not interested in the offer to be General Manager of Trusts. Mr Wilson replied stating that it was not an offer, but rather a re-assignment/re-designation. Ms Longsworth never returned to work, and the next day commenced her claim in the Supreme Court.
The trial judge found that Mr Wilson's plan of action was designed to strip Ms Longsworth of her management of the Company and went to the root of her contract. She nevertheless held that in the absence of a resolution of the Board of Directors of the Company, Mr Wilson's plan of action was merely a proposal for a re-designation from a majority shareholder (Mr Wilson) and could not be attributed to the Company. The trial judge felt constrained to find that Ms Longsworth had abandoned her employment and breached her contract. The Company therefore succeeded on its counterclaim.
The judgment of the trial judge was overturned in the Court of Appeal. Awich JA, with whom Sosa P and Morrison JA agreed, delivered the judgment of the Court of Appeal. The Court of Appeal held that the trial judge was correct to find that the acts of Mr Wilson amounted to acts of constructive dismissal, but that she was wrong to find that the acts of Mr Wilson could not be attributed to the Company. Awich JA was of the view that the evidence before the trial judge proved that in practice Mr Wilson was the directing and controlling mind and will of the Company and directed and controlled its affairs. Morrison JA, delivering a concurring judgment, concluded that Mr Wilson acted at all times in his capacity as a director and chairman of the Company, and that in re-designating Ms Longsworth's position, he was acting within the scope of his authority. Morrison JA was therefore of the view that, by operation of the principles of agency, Mr Wilson's actions would ordinarily be taken to be the actions of the Company.
The Court observed that the Company had not appealed the trial judge's finding that once the actions of Mr Wilson could be attributed to the Company, the Company was liable for Ms Longsworth's constructive dismissal. But the Court took advantage of the opportunity to make a few observations about the Belize Labour (Amendment) Act 2011 (“the Act”), in particular sections 39(1) and 42A, as they concerned the issue of constructive dismissal.
The Court noted that the concept of constructive dismissal had been well-recognised as part of the jurisprudence of the English-speaking Caribbean. Ms Longsworth had relied on section 42A(1) of the Act, which provided in part that an employee was entitled to terminate the contract of employment without notice where the employer's conduct had made it unreasonable to expect the worker to continue the employment relationship.
Having considered the judgment of the Court of Appeal of England and Wales of Western Excavating (E. C. C.) Ltd v Sharp 1, which was referred to by the Court of Appeal of Belize, the Court held the view that the legislature in Belize, by enacting section 42A(1) of the Act, had adopted the unreasonableness test, that is, conduct by the employer which has made it unreasonable to expect the worker to continue in the employment relationship, and not the contract test applied by Lord Denning in Western Excavating. The Court therefore noted that in the circumstances set out by the trial judge and accepted by the Court of Appeal, Mr Wilson's conduct made it unreasonable to expect Ms Longsworth to continue the employment relationship. The question therefore remained whether Mr Wilson's conduct could be attributed to the Company.
On the issue of attribution, the Court was of the view that it was of fundamental importance to be reminded that Ms Longsworth's constructive dismissal claim was against BTCSL and that her claim was based on section 42A(1) of the Act. Section 2 of the Act defined “employer” as including a “company”. As such, where the employer was a company, as in this case, it was that company's conduct, as opposed to that of its agents and servants, which was required by section 42A(1) in a claim for constructive dismissal against that company.
Mr Williams SC, counsel for BTCSL, had raised a preliminary issue before us that attribution did not arise on Ms Longsworth's pleadings; that no argument on attribution was raised before the trial judge; and that there was no ground of appeal raised before the Court of Appeal on the issue of attribution. Accordingly, Mr Williams contended, it was improper for the Court of Appeal to have decided the...
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