Blue Power Group Ltd v Hyacinth McDonald and Another

• Jurisdiction: Jamaica
• Judge: Brown G. J
• Judgment Date: 23 November 2012
• Neutral Citation: [2012] JMSC Civ 169
• Docket Number: CLAIM NO. 2008 HCV 5735
• Court: Supreme Court (Jamaica)
• Date: 23 November 2012

[2012] JMSC Civ. 169

IN THE SUPREME COURT OF JUDICATURE OF JAMAICA

CLAIM NO. 2008 HCV 5735

Between

Blue Power Group Limited

Claimant

and

Hyacinth McDonald

1st Defendant

and

Trustee in Bankruptcy

2nd Defendant

Ms. Symone Mayhew & Ms. Jeroma Crossbourne instructed by Scott, Bhoorasingh & Bonnick for the Claimant.

Mr. Hugh Wildman for the Defendants.

Contract — Agent — Goods credited by employee and used to refurbish employer's premises — Vendor unpaid — Employer in liquidation — Whether employee contacted in her own name or in the capacity as agent — Whether employee personally liable or liquidator liable.

Brown G. J

1 The Claimant (formerly known as Lumber Depot Ltd.) is a duly registered company under the laws of Jamaica carrying on business as a supplier of hardware supplies. The 1 ^st Defendant is an Interior Decorator who was an employee of Cash Plus Development Limited. The 2 ^nd Defendant is the Liquidator of the Cash Plus group of companies and was joined as a party by Court Order dated 11 ^th day of November 2010.

2 The Claimant allege that by an oral agreement, hardware material and supplies were sold and delivered to the 1 ^st Defendant between November 2007 and December 2007 and has an outstanding balance of One Million Eighty Three Thousand Five Hundred and Four Dollars and Fifty-eight Cents ($1,083,504.58).

3 The Defendants have not denied the claim and contend that the proper party to the proceedings is the 2 ^nd Defendant, as Cash Plus Limited is in liquidation and not the 1 ^st Defendant. Thus, the Claimant should await the outcome of the liquidation process as the 1 ^st Defendant was at all material times acting as an agent with the Claimant's knowledge.

4 The issue in this case is whether the 1 ^st Defendant had contracted with the claimant as an agent of Cash Plus Limited or in her own name and without qualification between November 2007 and December 2007.

5 The Defendants are not disputing that the 1 ^st Defendant had obtained credit from the Claimant and that there is an outstanding balance on the account. The Claimant made demands on the 1 ^st Defendant to settle the debt and on June 11, 2008 the Claimant's manager wrote to the Defendant. This letter reads:

Dear Mrs. McDonald ,

We have provided you with the very best service in order to enable you to serve your clients. We extended short-term credit to you so that you could deal with your jobs expeditiously.

In return we have ended up with a receivable from you of $1,083,504.58. You have indicated that you are awaiting payments from your clients in order to settle the debt with us. Unfortunately, we are not in a position to wait for our funds any longer. We have submitted various invoices as requested by you to third parties but we must emphasise that the responsibility for settling the account is yours and yours alone. We have no direct relationship with any of your clients and we do not have any standing with them to establish our claim.

We hold you responsible for this amount and unless you make arrangements with us to settle this, we will have no alternative but to turn this matter over to our attorneys …….

Yours sincerely

Maj. Noel Dawes (retd.)

6 On the 19 ^th August 2008 Ms. Casie Jean Graham, Attorney-at-Law, responded on her behalf. This letter reads:

RE: HYACINTH MCDONALD ACCOUNT WITH LUMBER DEPOT LIMITED.

We are instructed to act for and behalf of Hyacinth McDonald in the captioned matter.

Our instructions are that whilst our client had entered into a short term credit facility with your client, the goods acquired were for the benefit and use of a third party.

Every effort is being made to liquidate the sums outstanding through the commitments we have received from the said third party. In light of this fact and based on the good business relations which have persisted over the years between our respective clients, we are seeking a stay of thirty (30) days from the date hereof before legal proceedings are instituted. During which time it is hoped that our client will be in a position to satisfy the outstanding debt.

Notwithstanding the foregoing, grateful we be apprised of any legal action which is being contemplated or has been instituted against our client.

7 It was the Claimant's case that the 1 ^st Defendant had been a customer of the Claimant since 2002 conducting transactions as the one in question on similar terms and conditions in her personal capacity as an Interior Decorator. She would purchase materials on credit on behalf of her clients as she decorate and renovate their properties. During the period, the Claimant instituted a credit facility for the 1 ^st Defendant who was allowed to credit supplies up to one million dollars for a period of thirty days. Whenever a payment was overdue, the Claimant sought payment from the 1 ^st Defendant and not her clients. In this case, the outstanding sum is for goods that were delivered between November 21, 2007 and January 7, 2008.

8 The Defendants, on the other hand, claimed that the Claimant was seeking to circumvent the liquidation process and place themselves in a preferential position over all other unsecured creditors of Cash Plus. In 2006 the 1 ^st Defendant was employed to Cash Plus Entertainment Limited and was responsible for refurbishing at least three projects for her employer, namely Pricilla's Night Club, Hillshire Hotel and Katz Club. Her employer authorised her to credit supplies on their behalf and later settled with their cheques. Various employees including the 1 ^st Defendant would order the goods which were then collected by another employee. Whenever a payment is due the claimant's employees would telephone Cash Plus employees and sometimes collect the cheque from their office. This was denied by the Claimant's employee who stated that it was the 1 ^st Defendant who gave her the number to call to speed up payments. The Claimant's witnesses also denied that they collected cheques from Cash Plus offices.

9 The fulcrum of the Defendants' case was (a) that at all material times the 1 ^st Defendant contracted with the Claimant in her capacity as an agent of the 2 ^nd Defendant which subsequently went into liquidation and not in her personal capacity. (b) That the 1 ^st Defendant had disclosed to the Claimant's employees that her principal was responsible to settle the debt. Thus, the Defendants argued that the 2 ^nd Defendant and not the 1 ^st Defendant is to be held liable for the debt. The 1 ^st Defendant, in her witness statement, said as follows:

In order to facilitate the performance of my duties, I was authorised to enter into arrangements for the employment of services and the provision of the required material at and to the respective properties of CPE.

In and around early 2007 I returned to Kingston to attend to project there, particular, renovation works on Priscilla's Nightclub and Katz Club; I started doing business with the Depot again.

For and behalf of CPE, I entered into an oral agreement with the Depot for the supply of lumber, cement and other hardware material to effect repairs and renovation to some of the properties owned and/or controlled by Cash Plus or CPE.

10 The Defendants called three witnesses, who were formerly employed to Cash Plus, to support their...