Bardi Ltd v McDonald Millingen

• Jurisdiction: Jamaica
• Judge: F Williams JA,P Williams JA,Phillips JA
• Judgment Date: 21 May 2021
• Neutral Citation: [2021] JMCA Civ 25
• Docket Number: SUPREME COURT CIVIL APPEAL NO 102/2017
• Year: 2021
• Court: Court of Appeal (Jamaica)

IN THE COURT OF APPEAL

BEFORE:

THE HON Miss Justice Phillips JA

THE HON Mr Justice F Williams JA

THE HON Miss Justice P Williams JA

SUPREME COURT CIVIL APPEAL NO 102/2017

Between

Bardi Limited

Appellant

and

McDonald Millingen

Respondent

Written submissions filed by Hylton Powell for the appellant

Written submissions filed by Chen, Green & Company for the respondent

Phillips JA

1 On 20 December 2018, we gave judgment in this matter. We made the following orders:

• “1. Appeal allowed.

• 2. Order made by Simmons J on 20 October 2017 is set aside.

• 3. The applicant can re-list the application to discharge the provisional charging order made by Daye J to be heard by another judge. MG should be served with that application.

• 4. A case management conference should be scheduled to deal with all the applications relative to the issues in controversy between the parties.

• 5. Written submissions to be filed by the parties within 21 days of this order on the question of costs.” (Emphasis supplied)

2 Simmons J (as she was then) had refused the application to discharge the ex parte provisional charging order and injunction granted on 18 December 2012 by Daye J to the respondent, McDonald Millingen (‘MM’). Having made the orders on appeal set out above, this is the costs aspect of the judgment, subsequent to receipt of submissions of counsel, pursuant to order 5.

3 The background facts to the case are set out in this court's judgment cited at [2018] JMCA Civ 33, and I will not repeat them in any detail here but assume that they are known. Suffice it to say that MM had done professional legal work in their capacity as attorneys-at-law for Mrs Margie Geddes (‘MG’). They filed a claim for fees due, then subsequently a bill of costs, and obtained a default costs certificate in the sum of US$1,048,807.19. Based on that certificate, MM obtained, ex parte, a provisional charging order against shares held by MG in Bardi Limited (‘Bardi’) and against shares owned by Bardi in Desnoes and Geddes Limited (‘D&G’).

4 Bardi took out an application to set aside the provisional charging order on several bases, one of them being severe prejudice to Bardi, given that its ownership of shares was caught by the provisional charging order, which had been granted based on the default costs certificate relating to fees charged by MM to MG. Bardi was not a part of that contract, and so was unrelated to that debt.

5 One of the main issues before the court was whether Simmons J was wrong to take the position that she could not set aside/discharge Daye J's order, even though made ex parte, as there were no new material circumstances since he had made it, and also that he had not been misled by the facts placed before him for consideration. It was her opinion that the issues had to be dealt with at the hearing for the final charging order.

6 The court found, by a majority, that although Part 48 of the Civil Procedure Rules (‘CPR’) sets out a procedure for making a provisional charging order final, which would be the general course to be followed, nonetheless, an interested party or adversely affected litigant ought not to have to wait for the hearing of the application to make the provisional charging order final, particularly if there is some apparent error leading to the provisional order or some new information has come to light (although that is not necessarily required). The party affected can speedily file an application seeking to have the provisional charging order discharged forthwith. The affected litigant can challenge the provisional order made ex parte as it is provisional only, and so subject to review. In this case, that application to set aside the provisional charging order would have been particularly applicable as there had been an offer to purchase the D&G shares held by Bardi at a premium, and that transaction was being prevented by the existence of the provisional charging order.

7 The result in the appeal (by a majority) was that the application to set aside the provisional charging order ought to have been considered by Simmons J, but that had not been done, and had she done so, the 84,000,000 D&G shares held by Bardi would have been released (as it ultimately was), save the amount of 7,500,000 of the said shares in D&G owned by Bardi, which remained subject to the provisional order, due to the fact that that order had been made in an earlier decision of this court (cited at [2018] JMCA Civ 11).

8 It is true that certain other matters remain to be considered at the hearing of the final charging order, namely, the true ownership of the assets/shares registered in the name of Bardi; whether MG and Bardi were separate legal entities and whether MG was acting, at all material times, as the alter ego of Bardi; and whether the court ought to have pierced the corporate veil. There was also the significant question of whether the 7,500,000 shares in D&G owned by Bardi, which remained charged, would be reviewed at the application for the final charging order, as that amount of shares was yet restrained on an ex parte order. The court had also not yet determined whether the provisional charging order should be discharged and/or made final.

9 At the end of the day, the court indicated that it may be prudent for:

• 1. Bardi to file an application to discharge the provisional charging order so that the restraint on the 7,500,000 shares could be released;

• 2. MG to file an application to set aside the default costs certificate (pursuant to Paul Chen-Young and others v Eagle Merchant Bank Jamaica Limited and others [2018] JMCA App 7 — as the learned judge who heard the application had retired without having delivered the judgment);

• 3. MM...