Leon O. Taylor v Wilfred Julien

JurisdictionCaribbean States
CourtEastern Caribbean Supreme Court
JudgeBaptiste JA
Judgment Date18 May 2021
Judgment citation (vLex)[2021] ECSC J0518-1
Docket NumberGDAHCVAP2016/0019
[2021] ECSC J0518-1

THE EASTERN CARIBBEAN SUPREME COURT

IN THE COURT OF APPEAL

Before:

The Hon. Mr. Davidson Kelvin Baptiste Justice of Appeal

The Hon. Mde. Gertel Thom Justice of Appeal

The Hon. Mr. Mario Michel Justice of Appeal

GDAHCVAP2016/0019

Between:
Leon O. Taylor
Appellant
and
[1] Wilfred Julien
[2] Annette Smith
[3] Carmen Juliette Smith
[4] Peter Smith
[5] Phillip Smith
[6] Daphne Ann Vidal
[7] Daphne Ann Vidal Executrix of the Estate of Charles David Williams, substituted for Charles David Williams by order of Madam Justice Clare Henry, dated January 25, 2013)
[8] Michael Julien
[9] Patricia Julien
Respondents
Appearances:

Mr. Dickon A. Mitchell, Mrs. Crystal Braveboy-Chetram and Ms. Skeeta Chitan for the Appellant

Mr. Alban M. John, and Ms. Vern Ashby for the Respondents

Civil Appeal — Company law — Sections 241 and 242 of the Companies Act — Exercise of directorial powers — Oppressive conduct by director — Whether the learned judge misapprehended the nature of the claim by wrongfully treating it as an oppressive claim and in particular, one in which the general affairs of PSDL was being conducted in an oppressive manner — Whether the learned judge erred in his findings of fact so as to warrant appellate interference — Whether the learned judge's order contravened the established legal principles which circumscribe the amplitude of orders made under section 241 of the Companies Act to what is necessary to rectify the grievance complained of — Whether Felicity was a duly qualified director despite not having resigned or been re-elected and was therefore authorised to execute the impugned conveyances

Leon O. Taylor (“Mr. Taylor”) was instrumental in establishing Pointe Salines Development Limited (“PSDL”) in 1966 as a holding company for approximately 200 acres of land. PSDL was in essence a family company. Mr. Taylor became its managing director from incorporation and was the largest voting shareholder at 50.1%. Conveyances were made between PSDL and Mr. Taylor, namely, a deed of conveyance dated 18 th April 2008 — described as a deed of gift — in respect of a property known as the Cave House property, the effect of which was to dispose to Mr. Taylor 1 acre 2 roods and 6 poles of land as a reward to him for his services to PSDL rendered between 1967 and 1985 and as a ‘special reward’. The second transaction, reflected in a deed of conveyance dated 4 th June 2010, was a deed of exchange whereby Mr. Taylor returned lands to PSDL that he had obtained by the deed of gift, and in exchange PSDL conveyed other lands to Mr. Taylor.

The minority shareholders of PSDL, the respondents to this appeal, brought a claim in the court below contending, among other things, that the conveyances were void in law as they were wrongly executed by Felicity Julien (“Felicity”) as director of PSDL, who had ceased to be a director effective 19 th February 2007. They also asserted that the exercise of directorial powers by Mr. Taylor and Felicity, resulting in the transfer of the Cave House property and the circumstances attendant upon that transfer, were oppressive and contravened the Companies Act of Grenada. Further, the conveyance of the Cave House property to Mr. Taylor as remuneration for his services to PSDL was wrong, since remuneration in section 104 of the Companies Act, does not include the transfer of real property; and there was no valuation of the Cave House property so as to determine whether proper consideration was given for the transfer. The respondents sought declaratory, injunctive and other reliefs. Mr. Taylor contended, among other things, that the decision of the board of directors of PSDL to convey the Cave House property to him for services rendered to it as managing director from 1966 did not constitute oppressive conduct within the meaning of section 241 of the Companies Act and as such there was no basis upon which the court should grant relief thereunder. He also contended that the issue of the managing director's remuneration was for the directors of PSDL and did not require shareholder agreement or approval, subject to PSDL's Articles of Association. He also argued that the term remuneration was not restricted to monies or cash and extends to real property. The learned judge was satisfied that the oppressive remedy regime under the Companies Act was engaged and the grounds set out in section 241(2) were satisfied so as to trigger the court's jurisdiction pursuant to subsection (3). The learned judge accordingly made a whole range of orders in the exercise of his discretion to put matters right and to restore a more equitable balance and prevent further oppression.

Being dissatisfied, Mr. Taylor filed several grounds of appeal. The critical issues arising from the appeal can be summarised as: (i) did the learned judge misapprehend the nature of the claim by wrongfully treating it as an oppressive claim and in particular, one in which the general affairs of PSDL were being conducted in an oppressive manner?; (ii) did the learned judge err in his findings of fact so as to warrant appellate interference?; (iii) did the judge's order contravene the established legal principles which circumscribe the amplitude of orders made under section 241 of the Companies Act to what is necessary to rectify the grievance complained of? The respondents also filed a counter-notice seeking an order that Felicity was not duly authorised to sign the conveyances at the time of execution as she was not a duly qualified director. They also sought the setting aside of so much of the judgment as held that Felicity remained a duly qualified director, having so continued despite not having resigned or been re-elected and was therefore authorised to execute the impugned conveyances.

Held: dismissing the appeal and ordering the appellant to pay costs of the appeal to the respondents of 2/3 of the prescribed costs of $113,649.00 awarded in the court below; dismissing the counter-notice with no order as to costs, that:

  • 1. A pleading must make clear the general nature of the case of the pleader since it is inimical to a fair hearing that a party should be exposed to issues and arguments of which he has no fair warning. The claim filed by the respondents clearly raised the issue of oppression, unfair prejudice and the disregard of their interests as shareholders or of the entity PSDL as a whole. Further, in the reply, the respondents specifically pled that the appellant acted oppressively in the running of PSDL and in particular by taking the Cave House property. It is therefore incorrect to assert that the respondents did not file or pursue an oppressive claim or seek oppression remedies under section 241 of the Companies Act. The claim was properly dealt with as an oppressive one. Accordingly, the argument that the learned judge misapprehended the claim or erred in treating it as an oppressive action under section 241 cannot be accepted. Moreover, the essential elements of the respondents' case were known to Mr. Taylor and he had sufficient notice of the case that was being made against him. Therefore, the argument that Mr. Taylor was exposed to arguments or issues of which he had no fair warning, also fails.

    McPhilemy v Times Newspapers Ltd and others [1999] 3 All ER 775 considered; Prudential Assurance Company Ltd v Revenue and Customs Commissioners [2016] EWCA Civ 376 at paragraph 20 considered.

  • 2. An appellate court should not interfere with the trial judge's conclusion on primary facts unless satisfied that the finding of fact is plainly wrong. This applies to findings of primary facts, the evaluation of those facts and inferences to be drawn therefrom. The adverb ‘plainly’ does not refer to the degree of confidence the appellate court may feel that it would not have reached the same conclusion as the trial judge. What matters is whether the decision under appeal is one which no reasonable judge could have reached. Moreover, a trial judge does not have to make a finding on every disputed item of evidence. It is enough if he makes a finding on matters which he needs to be resolved before coming to his conclusion. A review of the judge's findings is constrained by the circumstances that, usually, the initial fact finder would have been exposed to a wider range of impressions that influenced a decision on factual matters than would be available to an appellate court. For this reason, a measure of deference to the conclusions reached by the initial fact finder is appropriate. Unless the finding is insupportable on any objective analysis, it will be immune from review.

    McGraddie v McGraddie [2013] UKSC 58 considered; Fage UK Ltd v Chobani UK Ltd [2014] EWCA Civ 5 considered; Henderson v Foxworth Investments Ltd and another [2014] UKSC 41 considered; Volcafe Ltd and others v Cia Sud Americana de Vapores SA [2018] 3 WLR 2087, [2018] UKSC 61 considered; Re B (a Child) (FC) [2013] UKSC 33 considered; Sohal v Suri and another [2012] EWCA Civ 1064 considered; Perry v Raleys Solicitors [2019] UKSC 5 considered; Housen v Nikolaisen [2002] 2 SCR 235 considered.

  • 3. The weight of evidence is essentially a matter for the judge who has sat through the entire case and is immersed in all its aspects; he is aptly placed to test the evidence at first hand and his ultimate judgment reflects this total familiarity with the evidence. It is therefore inappropriate for this Court to interfere with that evaluation unless it is perverse. The trial judge must consider all the material evidence although it need not all be discussed in his judgment. The weight he gives to it is pre-eminently a matter for him subject only to the requirement that his findings be such as might be reasonably made. The complaint that the judge attached too much weight to Paula's letter protesting to the transfer of the Cave House property to Mr. Taylor does not approach the high hurdle which must be...

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