Mike Sagrani v Overseas Finance Ltd

• Jurisdiction: Caribbean States
• Court: Eastern Caribbean Supreme Court
• Judge: Georges J,Ephraim F. Georges
• Judgment Date: 09 August 1995
• Neutral Citation: VG 1995 HC 8
• Docket Number: SUIT NO. 49 OF 1995
• Date: 09 August 1995

IN THE HIGH COURT OF JUSTICE

(CIVIL)

SUIT NO. 49 OF 1995

In the Matter of the International Business Companies Ordinance, 1984

and

In the Matter of section 24 of the West Indies Associated States Supreme Court (V.I.) Ordinance 1968

and

In the Matter of Order 29 Rule 1 of the Rules of the Supreme Court 1970 and in the matter of our Intended Action

Between:

Mike Sagrani

Intended Plaintiff

and

Overseas Finance Limited

Intended Defendant

APPEARANCES:

Anthony M. Lynton for Intended Plaintiff/Respondent

Alair P. Shepherd, Q.C. (of the Barbados Bar) With S. Jack Husbands for the Intended Defendant/Applicant

DECISION

Georges J

(IN CHAMBERS)

1 Before the Court is a summons by the defendant herein to set aside an ex parte interlocutory injunction granted to the plaintiff on 24th April 1995 (on Counsel giving the usual undertaking as to damages), restraining the defendant company whether by itself, its officers, servants or agents or otherwise howsoever from interfering or obstructing the plaintiff in any manner whatsoever, in the exercise of his rights and the discharge of his duties as a director of the defendant company and also from doing, causing or permitting anything to be done which may affect the rights and interests in any way, of the plaintiff as a director of the said company.

2 The summons to set aside which was filed on April 26, 1995 had no supporting affidavit or grounds for setting aside. This in fact only materialised weeks later on June 8, 1995 followed by a supplemental affidavit in support sworn by the defendant's solicitor and filed (without leave of the Court) on 24th June 1995.

3 What is essentially in issue in these proceedings, is the validity of two meetings of directors of the defendant company allegedly held on 30th July 1993 and 9th December 1993 at the latter of which the plaintiff was purportedly dismissed in his absence and without having received the requisite seven days notice of the meeting as stipulated by Article 71 of the Articles of Association. In a nutshell the gravemen of the plaintiff's case as set out in paragraphs 2, 5, 6, 7, 8 and 9 of his affidavit in support of his summons for ex parte interlocutory relief dated 9th March 1995 is that:

(i) He is one of only two validly appointed directors of Overseas Finance Limited (“the Company”), the other being a Prakash Advani (Advani);

(ii) The meeting of 9th December 1993 was not properly constituted in that there was not the necessary quorum in attendance as stipulated by Article 14 of the Company's Articles of Association;

(iii) Further, he had not been given a minimum of seven days notice of that meeting as prescribed by Article 71 of the Company's Articles of Association; and

(iv) And furthermore, no where in the Minutes of the said meeting is there recorded any resolution removing him as a director of the Company.

4 The plaintiff therefore contends that since the meeting of 9th December 1993 was not properly constituted, it was consequently invalid, and the resolution purporting to remove him as a director would accordingly be null and void and of no effect.

5 In order therefore to protect his rights and to preserve his position and director of the Company, the plaintiff applied to the Court for a restraining order in the terms outlined earlier. The order was accordingly granted on a quia timet basis and on the conditions set out therein so as to preserve the status quo until resolution of the issue there being an apparent usurpation of the plaintiff's rights, powers and privileges as a director of the Company.

6 A draft originating summons seeking substantially the same or similar relief or remedy as that applied for in the ex parte summons as well as declarations on the validity of the Directors' meeting of 9th December 1993 and the resolutions passed thereat, was exhibited to the plaintiff's summons. One of Counsel's undertakings was to issue the originating summons by 15th May 1995. This incidentally was not done until 18th May, 1995. It was also directed that the defendant be at liberty to apply to the Court to vary or discharge the Order upon giving of three days notice to the plaintiff's solicitors of its intention to do so.

7 This basically follows the standard procedure for ex parte application in the Queen's Bench Division as set out at paragraph 32/1-6/8 on page 567 of the current Edition of the White Book.

8 The ex parte interlocutory order made on the 24th April 1995 was assailed on two main grounds.

9 Firstly it was argued that based on the facts and circumstances set out in Sagrani's affidavit filed 8th June 1995, the plaintiff ought not to have come by way of ex parte application but ought to have made on inter partes applications. Ex parte injunctions, it was submitted, were for cases of real urgency where there had been a true impossibility of giving notice. The plaintiff's affidavit did not disclose any urgency to Justify an ex parte application Mr Shepherd, Senior Counsel for the defendant pointed out referring to the dictum of Megarry J in BATES v LORD HAILSHAM (1972) 3 ALL ER 1019at 1025 h.

10 And the need for an inter partes hearing was all the more obvious learned Counsel contended, where, as in the instant case, there had been an on-going dispute between the parties and earlier litigation as well from which it is clear that the plaintiff would have been aware of the defendant company's registered office and its solicitor so as to give notice and serve any necessary documents if he so Wished.

11 The point is well taken for it does appear in retrospect that it would have been perhaps more appropriate to have initiated these proceedings on an inter partes basis. But there is an historical background to all of this which partly explains (though it does not Justify) the course which the plaintiff took, namely, that following his purported removal as a director of the Company in December 1993 efforts by him to elicit information from the defendant company's registered agent in Tortola proved futile. He was no longer accorded any recognition. See paragraph 12 of the plaintiff's supporting affidavit dated 9th March 1995. He was out in the cold as it were.

12 Once again I revert to the practice directions at paragraph 32/1–6/8 on page 567 of the current Edition of the White Book sub-paragraph 3(2) of which stipulates that:

“the affidavit in support (of an ex parte application for an injunction) should contain a clear and concise statement of the facts relied on as Justifying the application ex parte, including some details of any notice given to the defendant or if none has been given, the reasons for giving none.”

13 It is clear on the face of the plaintiff's supporting affidavit that no reasons (or facts) have been given to Justify the ex parte application although one can perceive (from paragraphs 11 and 12) the plaintiff's growing concern and anxiety as a result of his inability to function as a director and the negative response from the defendant company's registered agent.

14 I move on. The defendant's second ground for setting aside the interlocutory order is that there was non-disclosure of material facts by the plaintiff. Here, Counsel referred to the on-going prior dispute between the parties involving the validity of the meeting of directors held on 30th July 1993 and 9th December 1993, the validity of the resolution passed at the meeting of 9th December 1993 removing the plaintiff as a director, associated correspondence in connection with the said dispute and two related High Court suits viz No. 28 of 1994 and No. 64 of 1994 – all of which it was argued contained highly relevant material to the present issue and ought to have been disclosed by the plaintiff to the Court; (but was not) so as to have provided it with a full composite picture of the situation. These were all matters within the plaintiff's knowledge it was pointed out or could have been discovered with due diligence.

15 Learned Counsel then proceeded to dwell at length on the learning set out at paragraph 29/1/23 of the current Edition of the White Book under the rubric “Plaintiff's duty to make full and frank disclosure” and went on to cite the following cases and pertinent extracts from the Judgments therein which were illustrative of his point:

• (1) R v KENSINGTON INCOME TAX COMMISSIONERS EX PARTE PRINCESS EDMOND DE POLIGNAC (1917) 1 KB 486

• (2) THERMAX LIMITED v SCHOTT INDUSTRIAL GLASS LTD (1981) FSR 289

• (3) BANK MELLLATT v NIKPOUR (1985) FSR 87

• (4) LLOYDS BOWMAKER LTD v BRITTANNIA ARROW HOLDINGS PLC (1988) 3 All E.R 178

• (5) BRINK'S MATT LTD v ELCOMBE & OTHERS (1988) 3 All E.R 188

• (6) ALI & FAHD SHOBOKSHI GROUP LTD v MONEIM & ORS (1989) 2 All E.R 404

• (7) BEHBEHANI & ORS v SALEM & ORS (1987) 1 WLR 723

16 The duty of an applicant for an ex parte order of injunction to make the fullest possible disclosure of...