Heather Montaque v GM and Associates Ltd and Another

• Jurisdiction: Jamaica
• Judge: McIntosh JA,Morrison JA
• Judgment Date: 26 April 2013
• Neutral Citation: JM 2013 CA 42
• Docket Number: SUPREME COURT CIVIL APPEAL NO 72/2012 APPLICATION NO 118/2012,RESIDENT MAGISTRATES' CIVIL APPEAL NO 8/ 2012 APPLICATION NOS 234 AND 242/ 2012
• Court: Court of Appeal (Jamaica)
• Date: 26 April 2013

[2013] JMCA App 7

JAMAICA

IN THE COURT OF APPEAL

SUPREME COURT CIVIL APPEAL NO 72/2012

APPLICATION NO 118/2012

Between

Heather Montaque (Executrix of the Estate of Seaton Montaque)

Applicant

and

G. M. AND ASSOCIATES LIMITED

1st Respondent

and

George Gordon

2nd Respondent

Ransford Braham QC and Miss Marjorie E. Shaw instructed by Brown & Shaw for the applicant

Duane Thomas for the respondents

Franklin Halliburton for the applicant present

INJUNCTIONS - Interim injunction - Leave to appeal order refusing injunction - Whether there was a serious question to be tried

ORAL JUDGMENT

IN CHAMBERS

McIntosh JA

1 On 13 July 2012 when I delivered my oral judgment in this matter refusing the applicant's application for an interim injunction to restrain the respondents from transferring shares in the 2 ^nd respondent company which were the subject of a bequest under the will of the late Seaton Montaque, I promised to transform the informal note I made into something more presentable and make copies available to counsel as soon as the editing process had been completed. This is the fulfillment of that promise.

2 In a nutshell, this application has arisen as a result of the refusal by Campbell J of an application for interim injunctive relief heard by him on 11 May 2012. I cannot say a similar application to that now before me because they do not appear to be in the same terms. In addition, the application before Campbell J was made by Franklin Smellie, as 1 ^st claimant (hereafter referred to as such), in his capacity as ‘Executor of the Estate of Seaton Montaque’. In those proceedings the applicant was initially referred to as ‘the Third Party’ and upon being granted permission by the judge to be added as a party to the claim she became the 2 ^nd claimant. She was also given leave to appeal and is now the sole appellant in this matter.

3 I must confess to being in some doubt as to the learned judge's intention in granting leave to the applicant only as her interest in the matter would seem to me to accord with the 1 ^st claimant's as they are both executors of the estate of Seaton Montaque and the 1 ^st claimant had commenced the claim by himself. Yet leave was not granted to him. In the circumstances of this case the learned judge's view on the merits of the application for an injunction and an appeal in that regard would be relevant to both claimants. So why give leave to one and not the other unless perchance she was the sole applicant for leave?

4 Be that as it may, pursuant to the grant of leave to her the applicant filed notice and grounds of appeal on 28 May 2012 challenging the order of Campbell J and seeking to set it aside as it relates to his refusal of the 1 ^st claimant's application for an injunction and his refusal of her application for an adjournment. She filed the application now before me on 29 June 2012, supported by an affidavit from Marjorie Shaw, seeking:

• ‘1. An injunction restraining and preventing the Defendants from transferring, or perfecting the purported transfer, of the 100 shares belonging to and/or held by the Estate of SEATON MONTAQUE to G. M. & ASSOCIATES LIMITED, GEORGE EDWARD GORDON and/or to any other entity or person;

• 2. An injunction restraining preventing and/or precluding the Defendants, jointly and/or severally, from selling, disposing, transferring or otherwise dealing with the shares in the Company G. M. & ASSOCIATES LIMITED belonging to and/or held by the Estate of SEATON MONTAQUE, deceased;

• 3. An injunction suspending restraining and/or preventing the Defendants, jointly and/or severally from any further dealings in respect of the shares in G. M. & ASSOCIATES LIMITED held or previously held by the Estate of SEATON MONTAQUE, deceased;

• 4. Costs of the Application to be costs of the Appeal;

• 5. …’

5 In order to give some perspective to this appeal it is necessary to briefly outline the genesis of the dispute between the parties which has caused them to seek the intervention of the court. Mr Seaton Montaque, an integral part of the company G.M. & Associates Limited and 50% shareholder, departed this life on 10 July 2010. One year and slightly less than six months prior to that unhappy event, he had executed his last will and testament making provisions for his wife and children. In the first six paragraphs of his will he bequeath to them what seems to me to be substantial real estate holdings and in paragraph 7 he made the following provision:

‘ 7. I GIVE AND BEQUEATH my half ( ¹/₂) share in J.M. Associates Limited which should be sold and the proceeds divided equally between my wife and all my children named in the said Will.’

6 One may well take the view that when Mr Montaque made that provision he could not have expected it to have created the problem which it has, bringing into question the application of certain of the company's Articles of Association. The executors of his will take the view that the shares in this bequest fall to be disposed of in accordance with Article 29A(viii) while the respondents argue that the relevant Article is 29A(vi), a view apparently shared by the learned judge in the court below.

7 The notice of application for the injunction before Campbell J was not included in the documents before me but there is an anticipatory draft order which seems to contain what the 1 ^st claimant sought in the court below and appears to me to be more extensive as it related not only to the shares held by Seaton Montaque but also ‘all classes of shares’, restraining their registration and so on, without a duly executed transfer by the 1 ^st claimant. Not so in the present application which seemed to recognize that the transfer was in progress. Indeed in Miss Shaw's affidavit at para 63 she referred to the advanced stage of the transfer of the estate's shares in G.M. & Assoc. and the 1 ^st claimant's affidavit of 24 April 2012 exhibits copy transfer receipts. Additionally, my examination of the material before me did not disclose a copy of the claim in the court below.

Submissions

8 The Articles of Association relevant to the application and to the arguments of learned Queen's Counsel for the appellant, Mr Ransford Braham, are set out below for convenience.

‘29A(vi) If any person shall become entitled to any share by reason of the death or bankruptcy of any member he shall be bound forthwith to offer the same for sale to the members of the company at a fair price, such fair price to be determined by agreement between such person and the directors or in default of agreement by the auditors for the time being of the company whose decision shall be conclusive and binding and on all persons interested in the share and so soon as the said fair price has been determined the said person shall give to the secretary a notice of transfer in the manner hereinbefore mentioned containing as the price which he is willing to accept the said fair price and the same results shall follow as in the case of a notice of transfer voluntarily given. If the said person shall fail to give such notice of transfer the directors, may, as his agents, give the same for him.

29A(viii) Any member may, (subject to the provisions of the article next following) transfer by way of sale or otherwise or by will bequeath any share held by him to trustees in trust for or to a member or members of his family as hereinafter defined and in such case the foregoing provisions of this article shall not apply and in the case of such bequest the legal personal representatives of the deceased member may subject as aforesaid transfer the shares so bequeathed to such trustees (whether themselves or others) or to the legatee legatees or beneficiaries. For the purposes hereof a member of the family of any member shall include a husband wife son daughter grandchild or a father mother brother or sister of such member but no other person.

32: On the death of any member (not being one of two or more joint holders of a share) the legal personal representatives of such deceased shall be the only persons recognized by the company as having any title to the share or shares registered in his name.’

33: Any person becoming entitled to a share by reason of the death or bankruptcy of a member may upon such evidence being produced as may from time to time be required by the Directors elect either to be registered as a member in respect of such share or to make and execute such transfer of the share as the deceased or bankrupt person could have made. If the person so becoming entitled shall elect to be registered himself he shall give to the company a notice in writing signed by him that he so elects. The Directors shall in either case have the same right to refuse or suspend registration as they would have had if the death or bankruptcy of the member had not occurred and the notice of election or transfer were a transfer executed by that member.’

9 Briefly, Mr Braham QC argued that a proper construction of these Articles revealed three possibilities under which the shares of the deceased could have been dealt with. He submitted that even if the appropriate Article was 29A(vi) as the learned trial judge found, it was wrongly applied in that the Article required that the parties agree to a fair price failing which the auditors should determine the price. That Article entitled the parties involved to relevant information to accommodate negotiations leading to the determination of a fair price but Miss Shaw's affidavit indicated that important information to facilitate that process was not provided by the company and its directors hence what occurred did not amount to good faith negotiations. This, learned Queen's Counsel argued, showed that there was an issue before the court to be tried and the learned judge erred in holding otherwise. Further, Mr Braham submitted, Article 29A(vi)...