City of Kingston Co-operative Credit Union Ltd v Registrar of Co-operatives and Friendly Societies and Yvette Reid

• Jurisdiction: Jamaica
• Judge: CORAM: ANDERSON, J.
• Judgment Date: 16 February 2007
• Judgment citation (vLex): [2007] 2 JJC 1601
• Date: 16 February 2007
• Court: Supreme Court (Jamaica)

IN THE SUPREME COURT OF JUDICATURE OF JAMAICA

BETWEEN

CITY OF KINGSTON CO-OPERATIVE CREDIT UNION LIMITED

APPLICANT

AND

REGISTRAR OF CO-OPERATIVES AND FRIENDLY SOCIETIES

1 ^st RESPONDENT

AND

YVETTE REID

2 ^nd RESPONDENT

^nd

^st

JUDICIAL REVIEW - Order of Certiorari to quosh award

CORAM: ANDERSON, J

1 In this application for judicial review, the Claimant/Applicant, City of Kingston Co-Op Credit Union Limited, ("COK") seeks the following reliefs:

• 1. A Writ of Certiorari to quash the decision of the Registrar of Cooperatives and Friendly Societies,

• 2. An Order that the matter for be remitted to the First Respondent for re-hearing and a proper determination.

2 The ground on which the order of Certiorari is sought is that there was an error of law on the face of the 1 ^st Respondent's Award dated March 31, 2006. The "award" in question was that made initially by an Arbitrator appointed under the Registrar of Cooperatives and Friendly Societies Act ("the Act") in favour of the 2 ^nd Respondent, and later upheld by the 1 ^st Respondent pursuant to a reference to him under section 50 (3) of the Act.

3 It was the burden of the Applicant's submissions that the Arbitrator in these proceedings had made a finding, unsupportable in law, that COK's failure to deliver a registered title which was in its possession or control to the 2 ^nd Respondent, was the cause of the loss of the 2 ^nd Respondent's supply of goods contract with the Ministry of Education, Youth and Culture and a consequent loss of profit arising therefrom. The Applicant is of the view that the 1 ^st Respondent fell into the same error as the Arbitrator when he upheld the award and as such his decision ought to be quashed. The Arbitrator had fallen into error, and the first Respondent, in upholding the Arbitrator's Award, compounded that error of law. It was counsel's submission that there was no evidence of a causal connection between the two things and that, accordingly, any award which was premised on such a cause was bad in law as there was no fulfillment of the legal requirement for there to be causation between the conduct or behaviour complained of, and purported consequential loss.

4 In order to have a proper understanding of this matter, it is necessary to have regard to the history as gleaned from the various affidavits which have been filed herein, and in particular, that of Indera Persaud, COK's legal officer, sworn on May 4, 2006. I should note that while counsel for the 2 ^nd Respondent later took issue with Mrs. Persaud's affidavit on the basis of what she called "non-disclosure", there was no averment as to inaccuracy.

• 1. In or about 1991, Ms. Yvette Reid obtained a loan from the Applicant and delivered a certificate of title in the names of Matthew Henry and Mavis Henry. That loan was subsequently repaid.

• 2. In or about 1993 Ms. Yvette Reid obtained another loan from the Applicant which was secured by the same title and shares in COK. Ms. Reid was unable to service the loan which was liquidated by shares held in COK. The title remained with the Applicant until March 17, 2004 when it was delivered to Mrs. Mavis Henry pursuant to her instructions to COK.

• 3. By a contract dated October 23, 2003, between the Ministry of Education, on the one hand and Education Matters (a business apparently owned by Mrs. Mavis Henry, the mother of the 2 ^nd Respondent) on the other, Education Matters agreed to supply goods to the Ministry of Education and the Ministry would pay the contracted price. The contract period was ninety (90) days thus the putative date for ending the contract was January 21, 2004. Mrs. Henry was unable to obtain a loan to purchase the goods needed under the contract and, on or around the 16 ^th March, 2004, the Ministry of Education cancelled the contract. (The Ministry's termination letter is set out below in this judgment)

• 4. By a letter dated December 15, 2003 Mavis Henry advised COK that she wished " to use the title now in the possession of the Credit Union as collateral for a loan at the Self Start Fund ", which would facilitate the purchase of the goods that would form part of the contract with the Ministry of Education.

• 5. A letter dated December 31, 2003 was sent from COK to the Self Start Fund in which the Applicant said it would "forward the title to them as instructed ... as soon as we have been able to track down and receive same".

• 6. On the 16 ^th March 2004, the Ministry of Education cancelled the contract between itself and Education Matters.

• 7. On March 17, 2004 the aforesaid title was delivered to Mrs. Henry's attorneys-at-law.

5 Mrs. Yvette Reid, the 2 ^nd Respondent, was at all material times a member of C.O.K. Some time ago, Mrs. Reid raised a "dispute" with C.O.K. with respect to Certificate of Title in the name of her mother, Mrs. Mavis Henry, which title, it was alleged was being wrongly kept by C.O.K. It was the fulcrum of the allegation that as a result of the wrongful retention of the title by the Applicant, certain supply contracts which the 2 ^nd Respondent had with the Ministry of Education, were lost and damages were occasioned thereby. It perhaps needs to be pointed out that the contract, the benefit of which is being claimed by the 2 ^nd Respondent, was the same contract with "Education Matters Limited". Pursuant to an application for Settlement of Dispute under the Act, the "dispute" was referred to the Registrar of Cooperatives and Friendly Societies, who then referred the matter to an Arbitrator, under Section 50 (2), of the Act. The dispute was heard by the assigned Arbitrator, a Mr. Roy Stewart and, on 9 ^th September, 2005, he gave a written award. He made the following findings of fact.

• a) Wood Parchment and Company (a law firm) applied on behalf of COK to note the death of the deceased joint owner (Mrs. Henry);

• b) The Applicant knew where the title was; had knowledge that Yvette Reid and Mavis Henry wanted the use of the title for business purposes; and had no lawful justification for withholding the title from Mesdames Reid and Henry;

• c) The Applicant's letter of 31 ^st December 2003 was a mere promise and not an undertaking to deliver the title to the Start Fund; and

• d) Mrs. Henry is entitled to an award for loss of profits on the contract with the Ministry of Education. That it is immaterial that the loan from the Self Start Fund did not materialize or that the Applicant gave a letter of Undertaking to the Self Start Fund. Mesdames Reid and Henry were entitled as of right to have the title returned to them and the Applicant's failure to deliver the title prevented them from obtaining the loan.

6 C.O.K. appealed the award of the Arbitrator to the Registrar as it was entitled to do, by serving on him a Notice of Intention to Appeal under Section 50 (3) of the Act. The ground of appeal before the Registrar was that the Arbitrator was in violation of basic principles of contract law, namely that the Arbitrator erred in law and in fact, in his findings that:

• (a) "that Wood, Parchment & Company applied on behalf of City of Kingston Co-Op Credit Union Limited to note the death of the deceased joint owner" (page 9 of the award);

• (b) "that a connection had been established by Ms. Yvette Reid between her not receiving her Certificate of Title from the Credit Union in a timely manner and her losing the contract she had with the Ministry of Education;

• (c) "that the Claimant Mrs. Mavis Henry is entitled to an award for loss of profits on her contract with the Ministry of Education (page 11 of the Award);

7 It was the contention of C.O.K. that Reid and Henry (now deceased) did not present evidence to substantiate or prove that C.O.K. was the cause of alleged losses, Nor had it been shown that these losses were incurred as a result of the failure of C.O.K. to provide the registered title in question, so as to allow Mrs. Reid and Mrs. Henry to obtain a loan from Self Start Fund.

8 On his review of this matter pursuant to the Notice of Intention to Appeal, the Registrar found that:

• (a) a nexus was established by Yvette Reid and Mavis Henry between the failure of C.O.K. to return Mrs. Henry's Certificate of Title in a timely manner and the loss of the contract with the Ministry of Education, Youth and Culture; and

• (b) C.O.K. was liable to compensate Mrs. Henry for the loss incurred.

9 Submissions for the Applicant

10 Mr. Spence referred to the affidavit evidence of Ms. Persaud. It was his submission that it was the unchallenged evidence of C.O.K. that the only transaction that was brought to C.O.K's attention was an application "to use the title now in the possession of the Credit Union as collateral for a loan at the Self Start Fund." According to the Persaud affidavit, this would facilitate the purchase of the goods that would form part of the contract with the Ministry of Education. He suggested that, contrary to the finding of the Arbitrator, the letter from COK to the self Start Fund was an undertaking to provide the title in exchange for the loan, as soon as the title was found.

11 It was submitted further by Mr. Spence that the conclusion reached by the Arbitrator and upheld by the Registrar, that the failure of C.O.K. to deliver the title to the 2 ^nd Respondent was the cause for the loss of the contract with the Ministry by the 2 ^nd Respondent as well as the subsequent damages had no evidential basis. Additionally, notwithstanding that speculative conclusion, nowhere in the findings of the Arbitrator is there any recognition or understanding of the test to be applied in order to ground liability for damages. Thus, there appears to have been a failure of any appreciation of the concepts of remoteness of damage, or the issue of causation, especially in light of the fact that the only loss was economic loss, loss of...